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.