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First Cut: September Pending Home Sales Index points to higher sales of existing homes in October

The NAR’s Pending Home Sales Index for September was up 1.5% to 108.7 after a revised 107.1 in August, and gained 3.9% compared to a year-ago. Low mortgage rates have improved home affordability and consumers are moving to take advantage of this while gains in home prices are more moderate. The increase points to higher sales of existing homes in October, although that depends on contracts coming to fruition.

The index also suggested that sales are most likely to be stronger in two of four regions. The Midwest had a month-over-month increase of 3.1% and the South was up 2.6%. The index was down a negligible 0.4% for the Northeast, while it was down 1.3% in the West. Supplies of homes to buy are limited and this may be particularly acute in the West where the stock of homes is expensive and consumers may have more trouble getting a contract on an affordable unit.

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