WASHINGTON — More Americans signed contracts to buy homes in August, signalling that low mortgage rates may spark a sustained turnaround for the housing market.
The National Association of Realtors says its pending home sales index rose 1.6% to 107.3 in August. Pending home sales are up 2.5% from their pace a year ago.
Lower borrowing costs have been slowly boosting buyer demand. Persistently high prices, driven up by a tight supply of available homes, had previously blunted the benefits of low mortgage rates. Economists are optimistic that low mortgage rates will reverse the trend but say home construction will also need to pick up for the market to fully recover.
Pending sales is a measure of home purchases that are usually completed a month or two later.
Bani Sapra, The Associated Press