US pending home sales dive 7.1% in August

By Ovunc Kutlu

ISTANBUL (AA) - US pending home sales plummeted 7.1% in August, compared to the previous month, according to data released Thursday by the National Association of Realtors (NAR).

The market anticipated a 0.8% decline in sales, while the figure in July indicated an increase of 0.5%.

Pending sales in August were down 18.7% compared to the same month last year.

"Mortgage rates have been rising above 7% since August, which has diminished the pool of home buyers," said Lawrence Yun, the association’s chief economist. "Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets."

The pending home sales index, which is a forward-looking indicator of home sales based on contract signings, dove 7.1% to 71.8 points in August.

"It's clear that increased housing inventory and better interest rates are essential to revive the housing market," said Yun.

Pending home sales measure the change in the number of houses under contract to be sold but still awaiting transaction. They exclude new home construction. They are considered a forward-looking indicator of home sales based on contract signings.