US: Mixed signals for pending sales and purchase applications – Wells Fargo

Research Team at Wells Fargo, notes that the US pending home sales rose 1.3 percent in July to 111.3, marking the index’s second-highest level since 2010 while the mortgage applications for purchase rose 1.3 percent in late August but the year-over-year trend is slowing.

Key Quotes

“Pending Home Sales Rise Solidly

• Pending home sales, which typically lead existing sales by one or two months, rose 1.3 percent in July. The index now stands at its second highest post-recession level. June’s modest gain was revised lower, however, hinting that existing home sales may not quickly recoup July’s 3.2 percent drop.

• Sales spiked 7.3 percent in the West and rose 0.8 percent in the South and Northeast but fell 2.9 percent in the Midwest.

Mortgage Purchase Applications Also Rose

• Mortgage applications rose 2.8 percent in late August, following two weeks of declines. Refinancing applications rose 3.7 percent, while applications for home purchases rose 1.3 percent.

• Purchase applications have been trending lower on a seasonally adjusted basis and are up 4.8 percent year-to-year. The decelerating pace of growth suggests home sales should continue to improve but are not about to break out in any significant way.”