According to the National Association of Realtor’s This Week in Real Estate, it’s August Pending Home Sales Index (PHSI) climbed to its highest level in five (5) months. Pending sales increased by 4% month-over-month and rose 3.8% compared to August of the previous year. Regionally, the Midwest, South, and West posted monthly gains, while the Northeast experienced a modest decline. On an annual basis, all four regions recorded growth. The Mortgage Bankers Association reported continued improvement in homebuyer affordability for the fourth (4th) consecutive month in August. This trend has been driven by easing mortgage rates, a deceleration in home-price appreciation, and stronger income growth, factors that have collectively enhanced prospective buyer’s purchasing power. The report highlighted a 3.2% year-over-year increase in median earnings, which helped offset a 2.1% rise in mortgage payments. Typically, the first Friday of each month, known as “Jobs Friday,” marks the release of the Bureau of Labor Statistics (BLS) monthly employment report. However, due to the ongoing government shutdown, the BLS remains closed, leaving Federal Reserve officials without access to September’s employment data ahead of their policy meeting scheduled for October 28 – 29. However, ADP released its monthly private-sector employment report last Wednesday, indicating a loss of 32,000 jobs in September. Additionally, August’s previously estimated gain of 54,000 jobs was revised downward to a net loss of 3,000. Below are key events from last week as we concluded Q3 and the onset of Q4 impacting our business:
PENDING HOME SALES CLOSE SUMMER ON A HIGH NOTE. After falling in June and July, pending home sales were up in August, according to data published Monday by the National Association of Realtors (NAR). NAR’s Pending Home Sales Index rose 4.0% month over month in August to a reading of 74.7. This also represents a 3.8% increase compared to a year ago. Regionally, the level of contract signing was down month-over-month in the Northeast (1.1%), but up in the Midwest (8.7%), South (3.1%), and West (5.0%). All four regions posted annual increases, with the Midwest posting the largest increase at 6.7%, followed by the 4.2% increase in the South, a 2.6% jump in the Northeast and a 0.2% rise in the West. “Purchase mortgage application data from September indicates additional momentum, with buyers responding to lower rates. This suggests that the modest improvement in pending sales may continue into the fall, especially if affordability conditions stabilize,” Odeta Khushi, deputy chief economist at First American said in a statement. Read the full story here.
U.S. HOMEBUYER AFFORDABILITY IMPROVES FOR FOURTH STRAIGHT MONTH. Homebuyer affordability strengthened in August for the fourth consecutive month, as easing mortgage rates and rising incomes helped reduce monthly housing costs, according to new data from the Mortgage Bankers Association (MBA). The median monthly payment requested by purchase mortgage applicants declined to $2,100 in August, down $27 from July. Despite that drop, payments remained $43 higher than a year earlier, a 2.1% annual increase. By contrast, median earnings rose 3.2% year over year, helping offset payment gains and leaving affordability 1.1% stronger compared with August 2024. “MBA expects moderating home-price appreciation, coupled with lower rates, will continue to ease affordability constraints and support more housing market activity.” Read the full story here.
PRIVATE PAYROLLS DECLINED IN SEPTEMBER BY 32,000 IN KEY ADP REPORT. Private payrolls saw their biggest decline in 2½ years during September, a further sign of labor market weakening. Companies shed a seasonally adjusted 32,000 jobs during the month, the biggest slide since March 2023, payrolls processing firm ADP reported Wednesday. In addition to the drop in September, the August payrolls number was revised to a loss of 3,000 from an initially reported increase of 54,000. “Despite the strong economic growth we saw in the second quarter, this month’s release further validates
what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” ADP’s chief economist, Nela Richardson, said. Even with the slowdown in hiring, wages in September grew 4.5% on an annual basis, little changed from August, ADP said. Read the full story here.
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