Pending home sales cooled in September for the second straight month, with fewer homes available for sale especially at lower price points that would tend to attract first-time homebuyers.
The sales index, which is based on contract signings, declined 2.3 percent to 106.8 in September, the second lowest reading this year and down from 109.3 in August, the National Association of Realtors (NAR) said Thursday.
Still, the index is 3 percent above September 2014 (103.7), a sign of the housing market’s gradual improvement over the past year.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers,” said Lawrence Yun, NAR chief economist.
Yun said that there are reports of more competition than what is usually seen at this time of year because of “stubbornly low inventory conditions.”
“Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach,” he added.
The nation’s pace of growth slowed to 1.5 percent in the July-September quarter, down from 3.9 percent in the second quarter.
Despite the fluctuations, the housing market is expected to remain a bright spot in the nation’s economic picture this year.
“With interest rates hovering around 4 percent, rents rising at a near 8-year high, and job growth holding strong — albeit at a more modest pace than earlier this year — the overall demand for buying should stay at a healthy level despite some weakness in the overall economy," Yun said.
All four major regions showed a drop in activity last month.
Sales in the Northeast fell 4 percent, the Midwest had a 2.5 percent decline, sales dropped 2.6 percent in the South, and the West's sales were down 0.2 percent in September.