August Pending Home Sales at Record Low

The National Association of Realtors Pending Home Sales Index reported a record low of 85.5, the lowest since records began in January 2001.The Pending Home Sales Index is released during the first week of each month. It is designed to be the leading indicator of housing activity and is based on signed real estate contracts for existing single-family homes, condos, and co-ops.

This drop is lower than the 2.1 percent decline that economists were expecting in august. Although according to a recent National Association of Realtors survey more than 10 percent of sales contracts fell through because borrowers had problems securing credit. The largest impact on fall out was jumbo mortgages. In some areas as much as 30 percent of sales contracts above $417,000 fell through  in August.

In addition to the fall out a lot of the mortgage application drop can be attributed to the current credit crunch. There are many credit worthy people that are trying to buy homes, but cant because they no longer fall in between the current strict guidelines.