Pending home sales decreased 2.3% in September compared with August but were 3.0% higher compared with September 2014, according to the National Association of Realtors (NAR).
It was the second straight month that pending home sales fell.
Lawrence Yun, NAR's chief economist, says a combination of factors likely led to the recent dip in contract signings.
‘There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and Realtors in many areas are reporting stronger competition than what's normal this time of year because of stubbornly low inventory conditions,’ Yun says in a statement. ‘Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach.’
Yun points out that mortgage interest rates are still hovering around 4% and the job market continues to improve, which should bode well for the housing market in the months to come.
‘The overall demand for buying should stay at a healthy level despite some weakness in the overall economy,’ he says.
Regionally, pending home sales fell 4.0% in the Northeast, 2.6% in the South and 2.5% in the Midwest. The West, however, saw pending home sales inch up 0.2%.