Pending home sales decline 1.7 percent
After two months of consecutive increases, October brought a slight decline in pending home sales—falling 1.7 percent to 106.7. While year-over-year contract signings increased by 4.4 percent.
Despite the decline in inventory, NAR’s chief economist, Lawrence Yun, remains positive. “While contract signings have decreased, the overall economic landscape remains favorable,” he explains. “Mortgage rates continue to be low at below 4 percent—which will attract buyers—employment levels are strong, and many recession claims have dissipated.”
Market hot spots
Yun points out that markets with more affordable price points—approximately $250,000—are attracting more buyers, particularly the following areas:
- Fort Wayne, IN
- Pueblo, CO
- Columbus, OH
- Rochester, NY
- Lafayette, IN
The continued call for construction
Yun regularly points to construction as a means to fix the deficiency of affordable inventory. “We still need to address, and more importantly correct, inadequate levels of inventory across the country,” he explains. “There is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.”
Yun explains that as the population continues to increase, it’s more important than ever to address the lack of inventory. “We risk a lingering shortage of sufficient inventory if homebuilding only continues at its current pace over the next 20 years, when the U.S. population is projected to increase by more than 40 million over this period. Clearly, home builders must step in and construct more housing.”
The numbers by region
All but the Northeast experienced declines in October, though all four major regions were up in comparison to last year.
October pending home sales index:
- Northeast: Up 1.9 percent to 95.7—3.0 percent higher than last year
- Midwest: Down 2.7 percent to 101.4—1.8 percent higher than last year
- South: Down 1.7 percent to 125.3—5.1 percent increase from last year
- West: Down 3.4 percent to 91.9—7.5 percent increase from last year
Source: https://www.nar.realtor/newsroom/pending-home-sales-decline-1-7-in-october