According to the National Association of Realtors, the Pending Home Sales Index revealed the month of August saw a small dip in its numbers. Despite the fall, the results were stronger than this point last year.
Although the numbers have grown consistently for one year, the Index dropped 1.4 percent from July to August. On a high note, the Index reported a 6.1 percent improvement from August 2014. Cities in California and Colorado enjoyed an increase, but all other areas suffered slight declines. The Northeast was down 5.6 percent in August but gained 8.9 percent from a year ago. The Midwest slightly dropped 0.4 percent in August but enjoyed an increase of 6.5 percent from 2014. The South was down 2.2 percent in August but up 4.1 percent from the previous year. As the West posted gains, the market continued to follow the trend of strong demand and quick-moving supply.
Even though these numbers were a bit surprising to many economists, sellers should not be worried. Demand is outpacing supply, which elicits price growth in many markets. It is possible for the 2015 national median existing home price to rise over $220,000. This would be a 5.8 percent increase from last year. The decrease in pending home sales can be written off to the time of year and the effect of the dropping number of investors and foreign buyers.
Lawrence Yun, chief economist for NAR, predicts the market will pick up a bit without reaching any pre-bubble heights. He believes existing home sales will increase by 5.28 million, approximately 2 million less than the peak of 2005.