NAR Reports Pending Home Sales Rise Year-Over-Year in the South
The National Association of Realtors is reporting that pending home sales slowed some in August, but in the South region, which includes Texas, pending home sales grew 3.7 percent on a year-over-year basis.
“Sharply rising mortgage interest rates in the spring motivated buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized last month,” said Lawrence Yun, chief economist at the NAR. “Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead.”
However, it’s important to keep in mind that mortgage rates have trended downward over the past several weeks, and since NAR’s data only represents August, these new mortgage trends should have different effects on home prices and sales as 2013 draws to a close.
The end of the year is typically slow buying season both in Texas and elsewhere in the country, but lower mortgage rates could further influence buying activity in the inverse way that rising mortgage rates do. Yun hints that rising mortgage rates motivate potential buyers to make a new home purchase before rates go any higher. However, potential home buyers can also be motivated by low mortgage rates as they are more inclined to make a new home purchase before rates have the opportunity to increase.
Even with a tight inventory and fluctuating mortgage rates, Texas features one of the hottest housing markets in the country, especially in the Dallas metro area. In the Dallas – Plano – Irving market, home prices rose more than 10 percent on a year-over-year basis, showing that mortgage rate trends aside, Texas home buyers are hungry and are not letting anything deter them from making a new home purchase.
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