More Americans sign contacts in September to buy homes

WASHINGTON – More people signed contracts to purchase homes in September, an increase that likely points to rising sales in the closing months of 2016.

The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index rose 1.5 per cent last month to 110. Pending sales rose in the South and West in September, while slumping in the colder parts of the country: the Northeast and Midwest.

Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.

Sales of existing homes have improved for much of this year. Completed sales rose 3.2 per cent between August and September to a seasonally adjusted annual rate of 5.47 million, the Realtors said last week.

But stronger growth in sales is hindered by a dwindling supply of listings. Steady hiring and low mortgage rates have encouraged more Americans to search for homes to buy, but their options are increasingly limited.

The supply of available homes stood at 2.04 million units, down 6.8 per cent from a year ago. Tight inventories drove the median price of existing homes up 5.6 per cent from a year ago to $234,200.