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Pending Home Sales Index Moves Higher in September11-07-16 | News

Pending Home Sales Index Moves Higher in September
Year-Over-Year Hikes Logged in 22 of Last 25 Months

Based on contract signings, the Pending Home Sales Index climbed 2.5 percent higher in September, due in large part to a hefty gain in the West and a nominal hike in the South.

Home purchase contract signings increased in the West and South and lifted the Pending Home Sales Index (PHSI) to a 1.5 percent gain in September, the National Association of Realtors said.

The PHSI, now at a level of 110.0, is 2.5 percent higher compared to September 2015 and has risen on a year-over-year basis in 22 of the last 25 months.

Regionally, the PHSI in the Northeast fell 1.6 percent to 96.5 in September, while the Midwest declined 0.2 percent to 104.6. However, the South rose 1.9 percent to an index of 122.1, and the West jumped 4.7 percent to 107.3.

"Buyer demand is holding up impressively well this fall, with Realtors reporting much stronger foot traffic compared to a year ago," said Lawrence Yun, chief economist for the NAR. "Although depressed inventory levels are keeping home prices elevated in most of the country, steady job gains and growing evidence that wages are finally starting to tick up are encouraging more households to consider buying a home."

But the market is still suffering from one major predicament, as inventory remains "painfully low," Yun said. "It (the housing shortage) is leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices."

Architecture Billings Decline in September
Broad-based weakness in most segments drove the Architectural Billings Index (ABI) down for the second straight month in September, dropping to 48.4 from 49.7 in August.

Any score above 50 reflects an increase in billings, while anything below 50 means the opposite. Architecture billings for construction projects typically lead construction spending by nine to 12 months.

The American Institute of Architects, the organization that keeps track of the ABI, said the residential (48.8), institutional (49.0) and mixed practice (49.8) components of the index all fell, while the commercial/industrial (50.4) segment remained just above the threshold.

The September new projects inquiry index was 59.4, down from 61.8 the previous month.

On a regional basis, billings in the Northeast (44.0) and West (49.5) both recorded three-straight monthly scores below the 50-point threshold, while the South (53.4) and Midwest (50.1) remained in positive territory.