Pending home sales inch up 0.3 percent in September

Pending home sales inched up 0.3 percent in September as it remained difficult for prospective buyers to qualify for mortgage financing, according to the National Realtors' Association. Pending sales are a reliable barometer of future purchases.

Tony Dejak/AP/File
A home for sale in Cleveland Heights, Ohio. Pending home sales grew 0.3 percent last month, according to figures released by the National Association of Realtors Monday, Oct. 27, 2014.

The number of Americans signing contracts to buy homes ticked up slightly in September, as it remained difficult to qualify for mortgage financing.

The National Association of Realtors says its seasonally adjusted pending home sales index rose 0.3 percent over the past month to 105. The index remains half a percentage point below its 2013 average, although 1 percent higher than a year ago.

Tight credit and price increases through the middle of 2013 have limited buying activity. About 15 percent of the real estate agents surveyed for the index say they couldn't close a deal because the buyer was unable to obtain a mortgage.

The pending home sales are the latest in a batch of data that suggests that housing market growth remains frustratingly slow. Friday, the Commerce Department reported that sales of new single-family homes ticked up just 0.2 percent. It was expected to be a slow month, but strong sales for August were also revised downward, as the Christian Science Monitor reported last week:

Sales of new single-family homes increased just 0.2 percent in September to an annualized pace of 467,000, according to figures released Friday by the Commerce Department. August sales, too, were revised downward substantially to a yearly rate of 466,000, from 504,000. 

Because of the bloated initial gains for August, economists had been expecting a slight dip for September. The report came in below the anticipated 470,000 in sales. Still, September sales were 17 percent above the level seen in September 2013 and represented the highest reading for new home sales of any month since July 2008.

The median sale price for a new home last month was $259,000; the average price was $313,200. There were an estimated 207,000 new homes available for sale, a 5.7 months’ supply. 

New homes make up a relatively small portion of US real estate transactions – just 8 percent – and sales figures can be volatile month to month. But September’s report was more in line with the often-frustrating incremental growth that analysts have come to expect from the housing recovery over the past year or so. "Here is little evidence that the new single family housing market is decisively breaking out of its medium-term flat pattern,” MFR Inc. economist Joshua Shapiro writes in an e-mailed analysis. “The best that could be said is that perhaps there is some modest upside impetus,” hinted at by an upward trend in housing starts, which are an important early indicator of new home sales.

The report comes on the heels of Tuesday’s data release on existing home sales, which posted a 2.4 percent gain in September to hit its fastest annualized pace for 2014. One of the more hopeful signs in that strong report was the rise in sales of homes to families, with downward trends in sales of distressed homes and purchases by investors. Such investors largely propelled the early stages of the housing recovery by snapping up large numbers of underwater and undervalued homes. More families and first-time buyers wading into home buying is more indicative of a healthier overall market.

Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to