The Realtors’ leading indicator of future home sales fell for the fourth straight month in September and the drop was much greater than expected.
The National Association of Realtors’
This pushed the index below 102 from its peak in May when it hit 111.
The PSI, which tracks sales contract signings, is now 1.2% below the number of signings in September 2012.
Much of the drop in September contracts stemmed from rising house prices and higher mortgage rates, NAR chief economist Lawrence Yun says.
“In addition, 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,” Yun says.
Consumer confidence measures have continued to show weakness into October and asking home price data are trending upward. Benchmark rate averages have fluctuated slightly in a narrow range. Most recently the average 30-year rate was about nine basis points lower than it was at the beginning of the month.
The number of contract signings in the South fell by less than half of a percentage point month-over-month. The Realtors’ index fell 8% to 10% in the other three regions.
NAR’s pending sales index tracks the number of contracts signed that could turn into actual sales in a month or two. They don’t always translate into actual sales.
