A Decline in Pending Home Sales

      A Decline in Pending Home Sales

 

According to NAR or the National Association of Realtors, pending home sales declined for the fourth consecutive month in September. Experts say higher mortgage interest rates and higher home prices may have contributed to the decline in pending home sales.

 

 

Lawrence Yun, NAR chief economist, said concerns over the government shutdown also played a role. "Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity," he said. "In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers' inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases."

 

Yun notes this is the first time in 29 months that pending home sales weren't above year-ago levels.

 

 As a professional in the business most buyers I work with are complaining of the lack of inventory and higher home prices may affect their decision on a purchase.

Speaking to other professionals, many state that low appraisals are also contributing to canceled contracts.

 

Please see below for the “ Pending Home Sales Index”.

The Pending Home Sales (PHS) index measures housing contract activity. It is based on signed real estate contracts for existing single-family homes, condos and co-ops

 

The Pending Home Sales Index, a forward-looking indicator based on contract signings, fell 5.6 percent to 101.6 in September from a downwardly revised 107.6 in August, and is 1.2 percent below September 2012 when it was 102.8. The index is at the lowest level since December 2012 when it was 101.3; the data reflect contracts but not closings

 

The PHSI in the Northeast dropped 9.6 percent to 76.7 in September, and is 6.4 percent below a year ago. In the Midwest the index fell 8.3 percent to 102.3 in September, but is 5.7 percent higher than September 2012. Pending home sales in the South slipped 0.4 percent to an index of 116.2 in September, but are 2.0 percent above a year ago. The index in the West dropped 9.0 percent in September to 97.3, and is 9.8 percent lower than September 2012.  

 

Thank you,

Ainsley Daux

Florida Realty

(813)546-1954