There is good news in today’s housing data, with a solid increase in pending home sales and an uptick in mortgage applications.
The National Association of Realtors’ (NAR) Pending Home Sales Index took an upward turn by 1.3 percent to 111.3 in July, leaving behind a downwardly revised 109.9 reading in June. Last month’s index reading 1.4 percent higher than the 109.8 level from July 2015 and is at its second highest reading this year after April’s 115 level.
On a regional basis, index readings were up in the Northeast, South and West. But the Midwest saw its index reading drop by 2.9 percent to 105.8, which is 1.1 percent below the July 2015 level.
NAR Chief Economist Lawrence Yun welcomed the data, but lamented that it could have been even stronger.
“Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas,” said Yun. “More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There’s little doubt there’d be more sales activity right now if there were more affordable listings on the market.”
Separately, the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Aug. 26 offered more positive news. The Market Composite Index increased 2.8 percent on a seasonally adjusted basis and increased two percent on an unadjusted basis from one week earlier. The seasonally adjusted Purchase Index increased one percent from one week earlier, but the unadjusted Purchase Index decreased one percent compared with the previous week—but it was five percent higher than the same week one year ago. The Refinance Index increased four percent from the previous week while the refinance share of mortgage activity increased to 63.5 percent of total applications from 62.4 percent the previous week.
Among the federal home loan programs, the FHA share of total applications increased to 9.7 percent from 8.9 percent the week prior while the VA share of total applications increased to 12.5 percent from 12.4 percent. The USDA share of total applications remained unchanged at a 0.6 percent level.
