Presaging lower home sales in the fourth quarter of this year, pending home sales fell to their lowest level since December 2012 and posted a year-over-year loss for the first time in 29 months, according to the National Association of Realtors (NAR).
“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” said NAR Chief Economist Lawrence Yun. “In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget.”
“A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”
Pending home sales, a forward-looking indicator based on contracts signed to purchase homes, dropped by 5.6 percent month over month in September and were down by 1.2 percent year over year, NAR reported.
“This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014,” Yun said. “Even so, ongoing inventory shortages will continue to lift home prices, though at a slower single-digit growth rate next year.”