Pending Home Sales Index Rises on Low Mortgage Rates

Mark Lieberman

Managing Director and Senior Economist


  • National Association of Realtors’ Pending Home Sales Index (PHSI) ROSE 1.5 percent in September to 108.7;
  • Year-year the index ROSE 3.7 percent.


  • The PHSI ROSE to its highest level since December 2017 (109.8
  • The Index for September ROSE for the fourth time in the last five months;
  • The year-year increase is the largest since December 2015 (4.5 percent).

Data Source: National Association of Realtors (NAR)

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With mortgage rates remaining low, the National Association of Realtors Pending Home Sales rose in September for the fourth time in the last five months.

The NAR’s report came as Standard & Poor’s reported home prices, as measured by its Case Shiller CoreLogic Home Price Index barely budged in August.

At the same time, according to Freddie Mac’s most recent weekly survey of mortgage interest rates showed lending rates remaining at near record lows. The average rate for a 30-year fixed rate loan, according to Freddie Mac’s report last week, was 3.75 percent, down from 4.86 percent a year ago. The drop would reduce the monthly payment on a $300,000 30-year mortgage by almost $200.

The NAR’s pending home sales report –based on contracts for sale – compares with the government’s new home sales report which showed a decline of about 0.7 percent for September.

The two-month boost in pending sales couldn’t come at a better time for realtors who saw closings drop 2.2 percent in September, two months after the PHSI fell 2.5 percent.

While the 1.5 percent September gain was strong, it was made to seem even stronger with the downward revision of the August PHSI from 107.3 to 107.1.

The drift to lower home prices can only last so long before sellers pull back. The inventory of homes for sale which had increased for six straight months has not risen for three months in a row. The last time that happened, existing home sales fell by about 50,000 per month (seasonally adjusted annual rate). That followed a four-month stretch in which the median price of an existing single-family home fell an average of 1.7 percent per month.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

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