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Pending home sales in US rebound more than expected
[WASHINGTON] Contract signings to purchase previously owned US homes rebounded in August by more than forecast, helped by low mortgage rates and continued household income gains.
The National Association of Realtors' index of pending home sales increased 1.6 per cent from the previous month, with the gauge's 107.3 level at the second-highest since the end of 2017, data from the group showed Thursday. The rise compared with the median estimate of economists for a 1 per cent gain and a 2.5 per cent drop in July. Contract signings were up 1.1 per cent year-over-year on an unadjusted basis, the second straight rise.
The report adds to signs that the housing market is regaining momentum, potentially giving a boost to the economy for the first time since 2017, amid Federal Reserve interest-rate cuts and still-solid job growth. At the same time, inventories of available homes remain low, continuing to drive up prices and keeping many homes out of buyers' price ranges.
Pending home sales are often considered a leading indicator of existing-home purchases and a measure of the health of the residential real estate market in coming months.
"It is very encouraging that buyers are responding to exceptionally low interest rates," NAR Chief Economist Lawrence Yun said in a statement. "The hope is that housing starts quickly move into higher gear to meet the higher demand. Moreover, broader economic growth will strengthen from increased housing activity."