Pending home sales data across the U.S. jumped in August, with new contracts on home purchases rising by 8.1 percent, a rebound following two consecutive months of declines.
New data released Wednesday by the National Association of Realtors (NAR) showcase a rise in home sales based on contract signings, an indicator that offers a picture into the health of the U.S. housing market and broader economy.
Year-over-year trends still indicate an overall decline in home sales, despite low interest rates aimed at keeping the economy moving amid the COVID-19 pandemic and subsequent recession.
Reuters notes that this is a seven-month high for the index.
“Rising inventory and moderating price conditions are bringing buyers back to the market,” said Lawrence Yun, NAR’s chief economist. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”
Home sales in the South and Midwest saw the most regional growth, with the Midwest leading by an increase of 10.4 percent over the last month.
The Western states weren’t far behind, but the Northeast states posted the lowest gains, rising just 4.6 percent from July.
“The more moderately priced regions of the South and Midwest are experiencing stronger signing of contracts to buy, which is not surprising,” Yun explained. “This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”
Compared to the same data from one year ago in 2020, however, pending home sales are still down across all regions, coming in at 8.3 percent lower than this time last year.
This indicator coincides with the recently-released Consumer Confidence Index, which suggested pessimistic attitudes among U.S. consumers regarding their personal finances and economic outlook in September.