Pending home sales down a touch

WASHINGTON, Sept. 29 (UPI) -- Pending U.S. home sales fell in August for the second consecutive month after two months of gains, the National Association of Realtors said Thursday.

The Pending Home Sales Index, measuring contracts that will likely close in October, fell 1.2 percent to 88.6, the trade group said.

Region by region, the index dropped 5.8 percent in the Northeast and 3.7 percent in the Midwest. In the South, the index rose 2.6 percent. In the West, the index fell 2.4 percent.

Each regional index, however, is higher than a year earlier. From August 2010, the index has risen 1.3 percent in the Northeast, 8.2 percent in the Midwest, 7.6 percent in the South and 10.5 percent in the West.

"The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August," said NAR chief economist Lawrence Yun.

Yun also said the overall pattern includes restrictive lending.

"Financially qualified home buyers, willing to stay well within their means, are being denied credit -- a factor (seen) in elevated levels of contract failures," Yun said.

"We should be seeing existing-home sales closer to 5.5 million, but are expecting just over 4.9 million this year. The unnecessarily restrictive mortgage underwriting standards are attenuating the housing recovery and are a risk factor for the overall economy," Yun said in a statement.