Pending home sales fall in September
Pending home sales dipped 2.3% in September compared to August, according to the National Association of Realtors, as the hot housing market took a pause across the nation. The Pending Home Sales Index also fell on a year-over-year basis, as contract signings dropped 8% compared to September 2020.
All regions lower
The four major U.S. regions all suffered declines in both month-over-month and year-over-year numbers. The Northeast endured the largest decline in the latter category, as contract signings fell 18.5% from September 2020.
“Contract transactions slowed a bit in September and are showing signs of a calmer home price trend,” said Lawrence Yun, NAR’s chief economist. “Some potential buyers have momentarily paused their home search with intentions to resume in 2022.”
Inventory still an issue
Yun noted that low inventory is still a concern.
“Rents have been mounting solidly of late, with falling rental vacancy rates,” Yun said. “This could lead to more renters seeking homeownership in order to avoid the rising inflation, so an increase in inventory will be welcomed.”
By the end of the year, NAR expects home sales to have risen 6.4% in 2021. But the group also projects that the strong housing market will face headwinds in 2022, such as higher mortgage rates, and that sales will likely decline by close to 2% in 2022. After the double-digit price gain in home prices this year, Yun expects home prices to increase less than 3% in 2022.
Pending home sales (September 2021)
The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, decreased 2.3% to 116.7 in September (an index of 100 is equal to the level of contract activity in 2001) Signings decreased 8% year over year. All four national regions experienced a decline in pending home sales on a monthly basis as well as on a yearly basis.
September 2021 pending home sales activity
- Northeast: Down 2.3% on a monthly basis and 18.5% year over year
- Midwest: Down 3.5% on a monthly basis and 5.8% year over year
- South: Down 1.8% on a monthly basis and 5.8% year over year
- West: Down 1.4% on a monthly basis and 7.2% year over year
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