US Pending Home Sales Surge In August, But “Affordability Remains Challenging”

Pending Home Sales will be the tie-breaker for housing market sentiment in August (new-home sales ticked up while existing-home sales dropped) and is expected to rebound 1.4% MoM after two straight monthly declines. In fact, pending home sales surged a shocking 8.1% MoM in August (6 times expectations)…

Source: Bloomberg

That is the biggest MoM jump since June 2020, but YoY sales remain down 6.27%. This is the highest pending home sales index since January

Source: Bloomberg

Contract signings increased across all four regions, led by gains in the Midwest and South that were the biggest since June 2020.

“Rising inventory and moderating price conditions are bringing buyers back to the market,” Lawrence Yun, NAR’s chief economist, said in a statement.

“Affordability, however, remains challenging as home price gains are roughly three times wage growth.”

Finally, we remind readers that homebuyer sentiment and homebuilder sentiment could not possibly be more divergent…

Source: Bloomberg

Can Jay Powell afford to upset those homebuilders? What do homeowners know?