Pending sales of previously owned homes dropped unexpectedly last month, posting the biggest decline since 2013
Pending sales of previously owned homes dropped unexpectedly in September, according to the National Association of Realtors.
The NAR’s Pending Home Sales Index fell 2.3% last month – the biggest drop since the end of 2013. September’s decline follows a 1.4% tumble in August, and exceeds even the most pessimistic forecasts of economists, according to Bloomberg survey. The survey predicted anywhere from a 2.5% increase in pending home sales to a 1% decrease, according to Bloomberg.
The decline may have been fueled by tight inventory and stricter credit standards, according to the NAR.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers," NAR chief economist Lawrence Yun said in a statement. “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.”
Still, Yun said, he believes the housing market will continue to do well in the coming months.
“With interest rates hovering around 4%, rents rising at a near eight-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.
The total Pending Home Sales Index was 106.8 on a seasonally adjusted basis, the lowest reading since January. Pending sales fell in all four regions of the country, with the Northeast seeing the largest drop, 4%. Purchase contracts declined by 2.6% in the South, 2.5% in the Midwest, and 0.2% in the West.
The NAR’s Pending Home Sales Index fell 2.3% last month – the biggest drop since the end of 2013. September’s decline follows a 1.4% tumble in August, and exceeds even the most pessimistic forecasts of economists, according to Bloomberg survey. The survey predicted anywhere from a 2.5% increase in pending home sales to a 1% decrease, according to Bloomberg.
The decline may have been fueled by tight inventory and stricter credit standards, according to the NAR.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers," NAR chief economist Lawrence Yun said in a statement. “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.”
Still, Yun said, he believes the housing market will continue to do well in the coming months.
“With interest rates hovering around 4%, rents rising at a near eight-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.
The total Pending Home Sales Index was 106.8 on a seasonally adjusted basis, the lowest reading since January. Pending sales fell in all four regions of the country, with the Northeast seeing the largest drop, 4%. Purchase contracts declined by 2.6% in the South, 2.5% in the Midwest, and 0.2% in the West.
