(Kitco News) - Hopes for a stabilizing U.S. housing market were bolstered after the number of potential home buyers rose beyond expectations last month, according to the latest data from the National Association of Realtors (NAR).
The U.S. pending home sales index rose 4% in August, the NAR announced on Monday. The data was significantly better than forecasts, as economists expected a 0.3% rise. July’s print was revised to -0.3%. The Midwest, South, and West experienced month-over-month increases in transactions, while the Northeast saw a decline.
For the year, pending home sales rose 3.8% against expectations for a 1.9% increase and following the unrevised 0.7% rise in July. Sales increased across all four regions.
“Lower mortgage rates are enabling more home buyers to go under contract,” said NAR Chief Economist Lawrence Yun. “In the Midwest, low mortgage rates combined with high levels of affordability are attracting more buyers compared to other regions.”
Spot gold continued to challenge the record high from earlier this morning in the minutes following the housing data. It last traded at $3,828.33 per ounce for a gain of 1.82% on the day.
The report noted that August’s Realtor’s Confidence Index survey showed that 19% of NAR members expect an increase in buyer traffic over the next three months, up from 16% last month and unchanged from one year ago. Meanwhile, 19% expect an increase in seller traffic, down from 21% last month and up from 18% in August 2024.
Economists pay close attention to pending home sales because the report is a leading indicator of existing home sales, given that contracts are signed a few months before homes are actually sold.
The U.S. housing market has been trying to stabilize after seeing significant weakness over the past two years. Many potential home buyers have been priced out of the market due to rising prices and high mortgage rates.
