Pending Home Sales At Historic Low Level

Pending home sales were at a historic low level in October, according to new data from the National Association of Realtors (NAR).

The NAR Pending Home Sales Index (PHSI) in October fell 1.5% from the previous month to 71.4, the lowest number since the index was originated in 2001 – an index of 100 is equal to the level of contract activity in 2001. On a year-over-year basis, pending transactions declined 8.5%.

Regionally, the Northeast PHSI jumped 2.7% on a month-over-month basis to 64.8, marking the only region where pending sales were up from September to October. All four regions – Northeast, Midwest, South and West – were down year-over-year.

“During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years,” said Lawrence Yun, NAR chief economist. “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied. Multiple offers, of course, yield only one winner, with the rest left to continue their search.”

Yun added, “Home sales are rising in places where more inventory is available. Sales for properties priced above $750,000 were higher than a year ago, because there is more inventory at this price point than what we saw last October. Additionally, newly built home sales are up 4.5% year-to-date due to homebuilders’ ability to create more inventory. It is vital that we continue to focus on boosting housing supply by all means in all corners of the country over the coming months.”