October Pending Home Sales Slip 1.7%

Pending home sales fell back in October after two prior months of increases, the National Association of Realtors reported last week. However, they improved nationally and in all regions from a year ago.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell by 1.7% to 106.7 in October. Year-over-year contract signings jumped by 4.4%. With the exception of the Northeast, all regional indices saw declines in October.

In the Northeast, the index rose by 1.9% to 95.7 in October, 3.0% higher than a year ago. In the Midwest, the index fell by 2.7% to 101.4 last month, 1.8% higher than a year ago. Pending sales in the South decreased by 1.7% to 125.3 in October but improved by 5.1% increase from a year ago. The index in the West declined by 3.4% in October to 91.9, but increased by 7.5% from a year ago.

NAR Chief Economist Lawrence Yun attributed a decline in inventory and a small rise in mortgage rates in October from September to explain the drop in pending home sales. “While contract signings have decreased, the overall economic landscape remains favorable,” Yun said. “Mortgage rates continue to be low at below 4%–which will attract buyers–employment levels are strong and many recession claims have dissipated.”