Pending home sales didn’t budge from August to September as homebuyers continued to grapple with economic uncertainty.
On an annual basis, pending home sales declined by 0.9 percent, the National Association of Realtors reported.
The Northeast and South saw growth in sales on both a monthly and annual basis, while the Midwest and West saw declines.
Lawrence Yun | Chief economist at the National Association of Realtors
“Contract signings matched the second-strongest pace of the year. However, signings have yet to fully reach the level needed for a healthy market despite mortgage rates reaching a one-year low,” NAR Chief Economist Lawrence Yun said in a statement. “A record-high stock market and growing housing wealth in September were not enough to offset a likely softening job market.”
The most recent drop in mortgage rates has primarily spurred refinancing activity at this point, Bright MLS Chief Economist Dr. Lisa Sturtevant said in a statement. Sales are also expected to be pretty sluggish through the end of the year, but will also vary by region.
“Affordability is still a constraint even as rates have fallen to their lowest level in a year,” Dr. Sturtevant said in a statement. “And consumers are generally feeling more cautious amidst growing economic uncertainty.
Dr. Lisa Sturtevant | Bright MLS
“Looking ahead, sales will likely continue to be slow through the fourth quarter, but expect a lot of regional variation,” she continued. “Markets with stronger regional economies will see more robust buyer activity, while markets being hit by furloughs and layoffs could see a further pullback in home sales activity this winter.”
With ample inventory and lowering mortgage rates, economists expect homebuyers to bite eventually, Yun added, even though the government shutdown may provide more complications in select markets.
“Inventory has climbed to a five-year high, giving homebuyers more options and room for price negotiation,” he said. “Looking ahead, mortgage rates are trending toward three-year lows, which should further improve affordability, though the government shutdown could temporarily slow home sales activity.”
