Dive Brief:
- Pending home sales fell 2.3% between August and September, reaching a seasonally adjusted rate of 106.8, the National Association of Realtors reported Thursday. All four major U.S. regions saw a decline in September pending sale activity.
- While last month's dip marked the second-straight monthly drop and the second-lowest level of 2015, the rate was still 3.0% higher than during September 2014. Year-over-year pending home sale activity has risen for 13 straight months.
- NAR economists attributed September's decrease to limited inventory — especially for lower-income and first-time buyers — as well as stock market volatility prompting a "wait-and-see approach" for potential buyers.
Dive Insight:
Despite September's decline, NAR Chief Economist Lawrence Yun remains optimistic about the housing market as a positive force in the U.S. economy. "With interest rates hovering around 4 percent, rents rising at a near 8–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.
Pending sales are considered a sign of future buying activity, as they reflect the early stages of the home buying process. Last month, the NAR reported pending sales dipped 1.4% between July and August due to a tight supply of available properties and rising home prices.
Thursday's report is one of the last in the string of housing reports for September. Last week, reports found that September housing starts surged 6.5%, existing home sales rose 4.7%, and builder confidence rose 3 points to its highest level since October 2005. Earlier this week, however, the Commerce Department reported new home sales plummeted 11.5% in September.
