Pending home sales remained at a standstill in September, unchanged in the National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI). The PHSI posted 106.0 in September (repeating August’s reading); however, sales were 3.5 percent lower year-over-year. The Index is based on contract signings.
“Demand exceeds supply in most markets, which is keeping price growth high and essentially eliminating any savings buyers would realize from the decline in mortgage rates from earlier this year,” says Lawrence Yun, chief economist at NAR. “While most of the country, except for the South, did see minor gains in contract signings last month, activity is falling further behind last year’s pace because new listings aren’t keeping up with what’s being sold.”
“It’s an all-too-familiar tale of low inventory: Pending home sales momentum was flat as small pickups in activity in the Northeast, Midwest, and West were offset by post-hurricane weakness in the South,” says Danielle Hale, chief economist at realtor.com®. “People in all four regions signed fewer home contracts compared to one year ago, as would-be buyers struggle to find the right place among the limited number of homes for sale.”
“Buyers looking for a little relief from the stiff competition from over the summer may unfortunately be out of luck in the coming months,” Yun says. “Inventory starts to decline heading into the winter, and many would-be buyers from earlier in the year are still on the hunt to find a home.”
All but one of the four major regions in the U.S. saw increases in the PHSI in September, with the Northeast up 1.2 percent to 94.5, the Midwest up 1.4 percent to 102.9 and the West up 1.9 percent to 102.7. The South saw a decrease, down 2.3 percent to 115.9.
“Hurricane Irma’s direct hit on Florida weighed on activity in the South, but similar to how Houston has rebounded after Hurricane Harvey, Florida’s strong job and population growth should guide sales back to their pre-storm pace fairly quickly,” says Yun.
“While last fall existing-home sales finished on a strong note, this year’s data suggest that sales are likely to be weaker this year unless inventories improve,” Hale says. “Inventories continue to drop compared to last year, creating challenges for buyers across the country. Homes for sale, according to realtor.com data, are down 9 percent from a year ago in September and are expected to continue to decline from a year ago in October.”
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