Blame it on the foreclosure fiasco.
After a steady two-month climb, the National Association of Realtors announced Friday that its pending home sales index slipped 1.8% to a reading of 80.9, based on contracts signed in September from an August reading of 82.4. Neither month, however, is anything close to the brief bonanza of the 107.8 reading from the September 2009 surge that preceded the November 2009 initial tax credit deadline.
A mixture of positive and negative influences led to the overall dip, according to Lawrence Yun, NAR’s chief economist. “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,” he said.
Yun also added that tight credit and low appraisals continue to constrain the market.
"More significant negative changes will be seen next month, as the [foreclosure] moratoria more likely impacted October sales rather than September [sales]," said Carl E. Reichardt, managing director and senior equity research analyst with Wells Fargo Securities in San Francisco. "Data from builders on October new order trends ... appears to support this view."
Looking forward, Yun pointed positively to a "pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves. We’ve added 30 million people to the U.S. population over the past 10 years, but sales are where they were in 2000 ... that could come to the market once the economy gathers momentum.”
Matt Phair is a freelance writer in New York.
Learn more about markets featured in this article: San Francisco, CA.