According to data collected by the National Association of Realtors (NAR), pending home sales increased year over year for the first time in 11 months. The Pending Home Sales Index is a forward-looking indicator created by the NAR that tracks the number of home sales where a contract has been signed but the deal has not yet closed. The Index is often considered to be a leading indicator because it often takes four to six weeks between the time the contract is signed and the deal is officially closed.
The NAR reported an increase of 1 percent in the index year over year with a reading of 105 in September of this year, versus 104 last year. Although consumer access to credit remains tight, the supply of existing homes for sale rose in September, helping to slow the inflationary price environment seen earlier this year. Loan standards rose dramatically following the 2008 crisis, however with the final rule on what constitutes a Qualified Residential Mortgage (QRM) being defined last week, it should become easier for customers to obtain financing. The QRM definition is intended to determine which loans are exempt from the risk retention requirements of the Dodd Frank Wall Street Reform and Consumer Protection Act.
If you segment the Index geographically, the South saw the highest index reading of 118.5 in September, having seen growth of 1.7 percent year over year. A reading this high indicates that supply levels are high, keeping prices at lower prices relative to competing domestic markets. With an abundance of affordable housing in Florida, cities like Miami offer particularly attractive property valuations compared to similar cities across the country. If you are interested in capitalizing on this opportunity, please feel free to contact a RE/MAX agent today with questions regarding available real estate in the Miami area!