Pending Home Sales Slip Again
Pending home sales cooled in September for the second straight month to their second lowest index reading in 2015, the National Association of Realtors reported yesterday.
The Pending Home Sales Index declined by 2.3 percent to 106.8 in September from a slightly downwardly revised 109.3 in August, but came in 3.0 percent higher than a year ago. (103.7). Despite the decline, the index increased year-over-year for the 13th straight months.
All four major regions saw drops in September. The Northeast fell by 4.0 percent to 89.6 but improved by 3.9 percent from a year ago. The Midwest declined by 2.5 percent to 104.7 but remains 4.3 percent above a year ago. The South decreased by 2.6 percent to 118.3 in September and by 0.1 percent from a year ago. The West fell by 0.2 percent in September to 104.4, but was 6.6 percent above a year ago.
Predictions had called for a gain in pending home sales. Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said the back-to-back drops in the index may suggest a cooling of existing home sales in coming months, but noted despite the drop the index remains at a healthy level and is still up 2.9 percent over the past year.
“Although pending sales slipped on the month, measures of builder confidence remain solid, as the NAHB/Wells Fargo Housing Market Index posted a decade-high reading in October,” Vitner said. “Despite September’s decline, other housing-related indicators, including builder sentiment and household formations, have picked up considerably.”
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers,” said NAR Chief Economist Lawrence Yun. “Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach.”
Yun said the housing market should still likely remain one of the brighter spots in the economy in coming months. “With interest rates hovering around 4 percent, rents rising at a near 8-year high and job growth holding strong–albeit at a more modest pace than earlier this year–the overall demand for buying should stay at a healthy level despite some weakness in the overall economy,” he said.
