Homebuyers in August were busy

The number of home sales contracts signed soared in August, the National Association of Realtors reported this morning. Pending home sales, a leading indicator because contracts are typically signed a couple months before closings, increased 7.4% compared to July’s revised number and 8.8% compared to August 2007. Sales are largely increasing because people are picking up foreclosed homes and other distressed properties at bargain prices, especially in the worst-hit markets: California, Florida, Nevada, Rhode Island, and Arizona. Of course, this surge in sales doesn’t reflect the worsening situation in the credit markets after the Wall Street meltdown last month. We’ll have to wait until next month to see how that might impact the market’s ability to climb out of the worst housing crisis in decades.