Low inventory in the first-time homebuyers’ end of the market and financial market uncertainty have led to a slower stream of sales under contract in September, according to the latest figures from the Pending Home Sales Index (PHSI) from the National Association of Realtors (NAR).
Pending home sales in September declined for the second month in a row across all four regions — to the second-lowest reading for 2015.
The PHSI showed contract signings declined 2.3 percent to 106.8, from forecasts of 109.3. It was still 3 percent above last September’s figures of 103.7, however.
Even with September’s decline, the index has increased year over year for 13 straight months.
“It is possible that buyers are being pickier,” said Danielle Hale, managing director of Housing Research at NAR. “As they have seen price growth, I think buyers are being fussier, so quality properties at the right price are selling amid a lot of competition and that can make it difficult for buyers.”
At the same time, sellers are realizing that it might be hard to find another home if they sell so their decision to sell is being put off, she said.
The future health of the housing market is still being driven by sustainable fundamentals, she added.
Even with a decline in September and August, the “breakneck pace” of the spring and summer markets will ensure it is a good year for sales, said Hale. Existing home sales are forecast to come in around 5.29 million for 2015 according to NAR.
The growth over spring and summer has been busier than anything seen in the last eight years, added Hale. And a pool of buyers is waiting, ready to buy.
“There are buyers in the market who are well-qualified, they have probably had jobs for a while and have been able to save up,” said Hale.
The housing market will continue to be one of the more upbeat elements of the economy this year, said Lawrence Yun, NAR chief economist.
“With interest rates hovering around four percent, 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.”
