Pending home sales dip, but outlook positive
Posted on Tuesday, November 26, 2013 at 8:55:47 AM
Despite a strong buyer demand for real estate, the number of pending home sales decreased in October, according to the National Association of Realtors.
Even with affordable residential financing, housing market conditions fluctuated across the country, possibly contributing to the declining statistic.
Overall, the Pending Home Sales Index, based on contract signings, dipped slightly for the month from 102.7 in September down to 102.1. That represents its lowest level since December 2012's 101.3.
However, the slight change wasn't unforeseen, according to Lawrence Yun, NAR chief economist.
"The government shutdown in the first half of last month sidelined some potential buyers," said Yun. "In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval."
In addition, Bloomberg reported that residential financing rates once pushed buyers into the market, but that may be changing. As rates continue to tick up on a year-over-year level, it could alter some buyer preferences.
Regardless of recent activity, Samuel Landy, president and CEO of UMH Properties Inc., told the media outlet in an earnings call that many housing analysts believe that buyer demand will still exceed supply. He added that a strong market is expected for at least a decade.