Pending home sales declined 1.8%, following the foreclosure moratorium, according to the National Association of Realtors® (NAR). The NAR released the report directly from the 2010 Realtors® Conference & Expo.
The Pending Home Sales Index, a forward-looking indicator, slipped 1.8% to 80.9 based on contracts signed in September from an upwardly revised 82.4 in August. However, the index remains 24.9% below 107.8 in September 2009.
“Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead,” Lawrence Yun, NAR chief economist said. “Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. However, tight credit and appraisals coming in below a negotiated price continue to constrain the market.”
The index in the Northeast slipped 1.7% to 59.6 in September and is 28.3% below a year ago. In the Midwest the index fell 5.7% in September to 64.2 and remains 33.0% below September 2009. Pending home sales in the South declined 3.5% to an index of 87.6 and are 19.1% below a year ago. In the West the index rose 3.5% to 104.6 but is 24.7% below September 2009.
“For 2011 we should see more than 5.1 million existing-home sales, up from about 4.8 million this year. Housing starts are expected to rise to 716,000 in 2011 from 598,000 this year,” Yun said. “We’ve added 30 million people to the U.S. population over the past 10 years, but sales are where they were in 2000, so there appears to be a sizable pent-up demand that could come to the market once the economy gathers momentum.”