Pending home sales in September were flat compared with August but were down about 3.5% compared with September 2016, according to the National Association of Realtors (NAR).
NAR’s Pending Home Sales Index was at a score of 106.0 – unchanged from August. It was the lowest reading since January 2015. The index has fallen on an annual basis in five of the past six months.
The lack of contract signings was a result of a low inventory and high home prices, explains Lawrence Yun, chief economist for NAR.
“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,” Yun says in a statement. “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.”
Unfortunately, this scenario isn’t going to get better anytime soon:
“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.”
Yun adds that although hurricanes Harvey and Irma had some impact on pending home sales in September, the areas impacted by the storms should be “back to their pre-storm pace fairly quickly.”
About 29% of contract signings in September were to first-time buyers, the lowest share in two years.
Furthermore, existing sales were down notably on an annual basis in the price range below $250,000, but up solidly in higher price brackets.