Pending U.S. home sales fall in August, industry group says
Americans signed fewer contracts for home purchases in August as interest rate increases and higher prices tempered demand, according to a real estate trade group.
The National Assn. of Realtors said Thursday that its pending sales index fell 1.6% from July. The index represents contracts signed for existing homes, but not yet closed -- providing a look into future market activity. Pending sales remain 5.8% higher than last year.
The monthly decline was to be expected, said Lawrence Yun, the association’s chief economist. The swift rise in mortgage interest rates since May, he said, caused many to expedite their purchases, fearful that rates would climb even higher.
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In addition to the rising cost of housing, the group said continuing low inventory and tight lending conditions held back pending sales.
The association said it expected existing home sales to reach nearly 5.2 million units by the end of this year, an 11% increase from 2012. The group forecast sales to remain basically flat in 2014.
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