More evidence of a softer US housing market emerged this week as the National Association of Realtors reported pending home sales data.
The NAR’s Pending Home Sales Index was down 2.6% in October to 102.1 (Sept: 104.8) with year-over-year contract signings down by 6.7%, the 10th consecutive month of annual decreases.
“The recent rise in mortgage rates have reduced the pool of eligible homebuyers,” said NAR chief economist Lawrence Yun.
But he added that sales match the level of 2000 and believes that the long-term outlook gives reasons to be optimistic.
“Mortgage rates are much lower today compared to earlier this century, when mortgage rates averaged 8%. Additionally, there are more jobs today than there were two decades ago,” said Yun. “So, while the long-term prospects look solid, we just have to get through this short-term period of uncertainty.”
Yun expects existing-home sales this year to decrease 3.1% to 5.34%, and the national median existing-home price to increase 4.7%. Looking ahead to next year, existing sales are forecast to decline 0.4% and home prices to drop roughly 2.5%.