Pending Home Sales Fall 10th Straight Month
Mike Sorohan email@example.com
Pending home sales fell by 2.6 percent in October, the 10th consecutive monthly decrease, the National Association of Realtors reported yesterday.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined to 102.1 in October, down from 104.8 in September. However, year-over-year contract signings dropped by 6.7 percent.
Regionally, only the Northeast saw an increase in pending home sales, rising by 0.7 percent to 92.9 in October, but fell by 2.9 percent below a year ago. In the Midwest, the index fell by 1.8 percent to 100.4 in October and is 4.9 percent lower than a year ago.
Pending home sales in the South fell by 1.1 percent to 118.9 in October and by 4.6 percent from a year ago. In the West, the index fell by 8.9 percent in October to 84.8 and fell by 15.3 percent from a year ago.
"We continue to view the current slowdown in the housing market, led by a halt in October contract signings in the West, as a healthy deceleration in the market," said Mortgage Bankers Association Chief Economist Mike Fratantoni. "Home prices had galloped ahead of wage growth for too long, particularly in the coastal markets. Now, with the job market quite strong, and sellers recalibrating how aggressive to be with list prices, the housing market is seeking to find its footing. However, while inventory remains tight, the underlying demand fundamentals remain strong. We expect the pause in activity to end next year."
NAR Chief Economist Lawrence Yun , NAR chief economist, expressed pessimism, noting 10 straight months of decline "certainly isn't favorable news" for the housing sector.
"The recent rise in mortgage rates have reduced the pool of eligible homebuyers," Yun said. "Interest rates are not going down; in fact, they are probably going to increase even further."