Pending home sales were expected to rise 2.9% MoM in September, breaking the tie between a disappointing slowdown in new home sales and exuberant surge in existing home sales. However, after screaming to a record high in August, September pending home sales tumbled 2.2% MoM, but the YoY gain pushed up to +21.9%.
That is the biggest YoY gain since 2009 (and remains above the previous record high in 2005)...
The drop in the index may represent a pause in the housing surge as lean inventory causes prices to soar, crushing affordability.
“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” Lawrence Yun, NAR’s chief economist, said in a statement.
“With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”
By region, pending home sales fell in three of four regions, including a 3.2% drop in the Midwest. Contract signings also declined 3% in the South and 2.6% in the West.