Pending us property sales continue to slide in september

Photo credit: Michael Patrick

The NAR report shows that pending transactions for property in the US decreased last month for the fourth month in a row, as rising mortgage rates and house prices caused buying activity to slow down.

Indeed, sales fell 5.6 per cent in September and are now 1.2 per cent below the same month last year; the first time sales have fallen year-on-year in 29 months.

The NAR Pending Home Sales Index is now at its lowest level since December 2012.

“Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity,” explains Lawrence Yun, NAR chief economist.

The government shutdown also had a significant effect upon buying activity across the country, notes Yun. “Government and contract workers were on the sidelines with growing insecurity over lawmakers’ inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases.”

As a result, the National Association of Realtors now expects home sales to stay low in the fourth quarter as the market enters a flat trend going into 2014. Overall for 2013, existing home sales will be 10 per cent higher than 2012, while prices are anticipated to be roughly 11 per cent higher.

House prices will continue to climb due to an ongoing shortage of housing supply, but the rate of growth will be slower. A more moderate of 5 to 6 per cent is predicted for 2014.