The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched 0.3 percent higher to 105.0 in September compared to one month earlier – 104.7 in August.
However, pending sales rose 1.0 percent year-to-year in a comparison to September 2013 (104.0). The index is above 100 for the fifth consecutive month, and it's the second highest level for pending sales since last September.
"Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year," says Lawrence Yun, NAR chief economist. "Additionally, the current spectacularly low mortgage rates should help more buyers reach the market." Yun says moderating price growth and sustained inventory levels keep conditions favorable for buyers.
Despite improved housing conditions and low interest rates, however, tight credit remains a problem for some buyers. When asked about the reasons a sale didn't close in September, about 15 percent of Realtors reported a client who could not obtain financing.
Yun says the final rule on Qualified Residential Mortgages (QRM) should improve access to credit once it goes into effect next year. "The rule provides clarity for lenders and is a win for creditworthy consumers by ensuring they continue to have access to safe and affordable loan products without overly burdensome downpayment requirements," he said.
Pending sales in the Northeast increased 1.2 percent to 87.5 in September, and they're 2.9 percent above a year ago. In the Midwest, the index decreased 1.2 percent to 101.2 in September. It's now 4.0 percent below September 2013.
Pending home sales in the South increased 1.4 percent to an index of 118.5 in September, and 1.7 percent year-to-year. The index in the West inched back 0.8 percent in September to 101.3, but it's still 3.6 percent above a year ago.
© 2014 Florida Realtors®
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