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Pending home sales were down in October, a decline the National Association of Realtors® attributed to the government shutdown.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, slipped 0.6 percent to 102.9 in October from 102.7 in September and fell 1.6 percent below 103.8, its level in October 2012. This is the lowest the indicator has been since December 2012 when it was 101.3. The data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, said weaker activity was expected. “The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” he said.
NAR projects existing-home sales to increase 10 percent for the year, totaling about 5.1 million, and reach approximately 5.2 million next year. With ongoing supply imbalances, the national median existing-home price is expected to grow nearly 11 percent this year, and moderate to a gain of 5 to 6 percent in 2014, when homebuyers might face additional challenges.
“New mortgage rules in January could delay the approval process,” Yun said, “and another government shutdown would harm both housing and the economy.”
