Pending Home Sales Dipped 2.3 Percent in September

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Pending home sales decreased 2.3% in September compared with August and were down 8% compared with September 2020, according to the National Association of Realtors’ (NAR) pending home sales index.

Regionally, and month over month, pending home sales fell 3.2% in the Northeast, 3.5% in the Midwest, 1.8% in the South, and 1.4% in the West.

Year over year, contract signings were down 18.5% in the Northeast, 5.8% in the Midwest, 5.8% in the South, and 7.2% in the West.

“Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,” says Lawrence Yun, chief economist for NAR, in a statement. “It’s worth noting that there will be less inventory until the end of the year compared to the summer months, which happens nearly every year. Some potential buyers have momentarily paused their home search with intentions to resume in 2022.”

Although housing supply remains low, Yun says he expects inventory to turn the corner in 2022.

“Rents have been mounting solidly of late, with falling rental vacancy rates,” he says. “This could lead to more renters seeking homeownership in order to avoid the rising inflation, so an increase in inventory will be welcomed.”

Once all home sale data has been tabulated by year’s end, NAR expects home sales to have risen by 6.4% in 2021.

NAR currently forecasts that home sales will decline by 1.7% in 2022.

Yun says home prices will moderate with only 2.8% growth in 2022 after a double-digit price gain of 14.7% in 2021.

Photo: Roger Starnes Sr.

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