Pending home sale index reflects eroding affordability

Oct. 28, 2013 at 11:21 AM
| License Photo

WASHINGTON, Oct. 28 (UPI) -- The U.S. Pending Home Sales Index slipped for the fourth consecutive month in September, a national trade group in Washington said.

The National Association of Realtors said their Pending Home Sales Index slipped 5.6 percent in September to 101.6 from a downwardly revised August level of 107.6.

The index is 1.2 percent lower than the September 2012 reading of 102.8.

NAR Chief Economist Lawrence Yun said the index, which hit a six-year peak in May, was likely reflecting eroding affordability.

"Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity," Yun said in a statement, noting it was the first time in 29 months that the index was below its 12-month prior level.

"This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014," Yun said.

The Pending Home Sales Index, which reflects sales activity one and two months down the road, is a comparison to the monthly average for 2001, its first year, which was assigned a value of 100.

The NAR said the Pending Home Sales Index for the Northeast dropped 9.6 percent to 76.7 -- a level that is 6.4 percent lower than September 2012.

In the Midwest, the index, dropped 8.3 percent to 102.3, reaching a level 5.7 percent higher than September 2012.

The index fell 0.4 percent in the South to 116.2, which is 2 percent higher than 12 months prior. In the West, the index came to 97.3, down 9 percent from August and 9.8 percent lower than September 2012.

Related UPI Stories
Topics: Lawrence Yun
Latest Headlines
Trending Stories
Pepsi to release 'Back to the Future Part II' inspired Pepsi Perfect
Nobel Prize in medicine awarded to parasitic disease scientists
Womb transplants begin in U.K. after Sweden's success
Gay Vatican priest comes out day before Pope Francis begins synod on family issues
Scientists find roadmap that may lead to 'exercise pill'