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
