Us buyers wait and see as property sales cool

Photo credit: Michael Patrick

US buyers are taking a wait-and-see approach to the housing market, as property sales cool.

Pending home transactions slowed in September 2015 for the second month in a row, according to the National Association of Realtors, with all four major regions seing a decrease in activity.

The index slipped 2.3 per cent, according to NAR. Although it remains 3 per cent up on September 2014 and has risen year-on-year for 13 months in a row, the index is now at its second lowest level of the year so far.

Lawrence Yun, NAR chief economist, attributes the drop partly to an ongoing shortage of supply, particularly in the lower end of the market where first-time buyers tend to be active.

"Realtors in many areas are reporting stronger competition than what's normal this time of year because of stubbornly–low inventory conditions," he explains. "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."

Despite contract activity softening from the more robust levels seen earlier this year, though, Yun believes the housing market will still be one of the brighter spots in the economy in coming months.

"With interest rates hovering around 4 per cent, rents rising at a near 8–year high, and job growth holding strong — albeit at a more modest pace than earlier this year — the overall demand for buying should stay at a healthy level despite some weakness in the overall economy."