The nation’s pending home sales activity was down for the second month in a row, and the market in the Northeast is showing multiple signs of weakness.
As of September, the Pending Home Sales Index — a forward-looking indicator of existing home sales based on contract signings — was 106.8.
Turns out that the volume of pending home sales now stands at its lowest level since January of this year, when the index landed at a downwardly revised 103.7.
The National Association of Realtors reported the index Thursday.
A more than two percent decline was reported from the downwardly revised index for August, when pending home sales also retreated from a month earlier.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and Realtors in many areas are reporting stronger competition than what’s normal this time of year because of stubbornly low inventory conditions,” NAR Chief economist Lawrence Yun explained in the report. “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.”
The disappointing pending home sales data comes on the heals of a report from the Census Bureau indicating that the seasonally adjusted annual rate of new home sales tumbled 12 percent in September.
But the Pending Home Sales Index was up three percent from September 2014 — marking the 13th consecutive year-over-year improvement.
Yun predicts that low interest rates, rising rents and healthy job growth will keep demand strong.
The Northeast had the biggest drop from August in pending home sales: four percent. That left the index for the region at 89.6.
It was the second consecutive month that the Northeast led a national decline.
New home sales in the Northeast were also weak in September, with the Census Bureau reporting a 62 percent month-over-month plunge — worse than any other region.
Pending home sales dropped 2.6 percent from August in the South, leaving the index for that region at 118.3.
A 2.5 percent decline in the Midwest left the index there at 104.7.
The index in the West fared best with a less than one percent month-over-month decline to 104.4.
