The National Association of Home Builders (NAHB) reported a 21-month high for pending home sales in the month of September.

The catalyst for this spike stems from lower mortgage rates. National buying power has increased by 6% due to improved interest rates.  The National Association of Realtors (NAR) believes this is the case for the two consecutive gains in sales reported.

Pending home sales are based on The Pending Home Sales Index (PHSI) data from the National Association of Realtors (NAR). The PHSI is an indicator that looks ahead based on signed contracts. The National Association of Realtors reported the highest PHSI since December of 2017 last month. It rose from 1.5% from 107.1 in August to 108.7 in September 2019. Looking at sales from a year-over-year basis, they were up 3.9% higher than reported just a year ago in 2018.

Looking at the September PHSI it was mixed regionally. In the Midwest it measured at 3.1%, in the South it was 2.6% higher, Northeast fell 0.4% and in the West it fell 1.3%. Although there were some regions that fell, the year-over-year Pending Home Sales Index (PHSI) grew in all four major regions which include the Northeast, South, Midwest and West. The increase ranged from 1.3% in the Northeast all the way to 5.7% in the South.

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