Following two straight months of improvement, pending home sales dipped 1.8% nationally in September, the National Association of Realtors reported.
NAR Chief Economist Lawrence Yun said the slide is largely a result of the foreclosure moratoriums put in place by lenders that are trying to determine the extent of the damage caused by inaccurate foreclosure filings.
The data reported by NAR reflects contracts, not closings, which normally lag by 30-60 days, if they close at all.
Yun also said the forward-looking index still shows the effects of the end of the home buyer tax credits, and will do so through the normally slow winter selling season. "It will take six months before the market normalizes," he said. "If sales match up with past normal winters, it will mean the recovery with be setting up nicely under its own power."
The economist said the tax credits helped keep housing from imploding altogether last year and the first half of 2010. But now, he added, its up to the job market. "If the job market stalls," he said, "that's when we run into trouble."
In his economic forecast, Yun expects 1.5 million new jobs to be added next year, on top of the 1 million created this year.
NAR believes existing home sales will increase 26% from the third quarter to a 5.24 million unit seasonally adjusted annual by 3Q 2011.
NAR economists claim pent up demand will be "unleashed as banks resolve their issues with foreclosures and the labor market improves."
