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After reporting two straight monthly decreases in U.S. pending home sales, the National Association of Realtors released a report on Wednesday showing pending home sales skyrocketed by much more than expected in the month of August.

NAR said its pending home sales soared by 8.1 percent to 119.5 in August after tumbling by 2.0 percent to a revised 110.5 in July.

Economists had expected pending home sales to jump by 1.4 percent compared to the 1.8 percent slump originally reported for the previous month.

The pending home sales index reached its highest level since January but was still down by 8.3 percent compared to the same month a year ago.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

“Rising inventory and moderating price conditions are bringing buyers back to the market,” said NAR’s chief economist Lawrence Yun. “Affordability, however, remains challenging as home price gains are roughly three times wage growth.”

“The more moderately priced regions of the South and Midwest are experiencing stronger signing of contracts to buy, which is not surprising,” he added. “This can be attributed to some employees who have the flexibility to work from anywhere, as they choose to reside in more affordable places.”

The report showed pending home sales in the Midwest and South spiked by 10.4 percent and 8.6 percent, respectively, although pending sales in the West and Northeast also surged up by 7.2 percent and 4.6 percent, respectively.


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