November 21, 2018

New pending home sales increase in October

The number of new approved contracts for single-family residential sales in October was up from September and October last year in the 11-county area monitored by the Northeast Tennessee Association of Realtors (NETAR).

NETAR’s New Pending Home Sales Index (PHSI), a forward-looking indicator based on new contract signing reported by Realtor Property Resource (RPR), was up by 0.9 percent from September and 8.3 percent from October last year. The moving average trend has slowing moved lower since July.

There were 759 new approved contracts in October compared to 727 in September and 642 last year, said Aaron Taylor NETAR President. "It's not unusual to see some market slowing as we move into the holidays, nor is it uncommon to see a spike in activity in November," he added. It was expected this year because mortgage rates are increasing and are expected to increase more next year, which has motivating buyers to lock in sales at the most advantage rate they can get.

September's new pending sales index was 124.7 up from 123.6 in September and 12.6 points higher than October last year.  The PHSI is a leading indicator for the housing sector based on pending sales of existing homes, condos and townhomes. The benchmark of 100 for the index is the 2015 annual average for new approved contracts. A sale is listed as pending when a contract has been signed, but the transaction has not closed. Sales are typically finalized in a month or two after signing. But it's not uncommon to see as many as 5 percent fall through. Lately, that fall-through rate has been a higher due to more sale of a current home and financing contingencies.

NETAR is the voice for real estate in Northeast Tennessee - is the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.