Pending home sales dipped in September, retreating slightly from a previous month of growth, according to the National Association of Realtors (NAR). The Pending Home Sales Index (PHSI) decreased 2.3% to 116.7, and contract signings decreased 8% year over year.
“Contract transactions slowed a bit in September and are showing signs of a calmer home price trend, as the market is running comfortably ahead of pre-pandemic activity,” says Lawrence Yun, NAR’s chief economist. “It’s worth noting that there will be less inventory until the end of the year compared to the summer months, which happens nearly every year.”
Each of the four major U.S. regions saw contract activity decline month over month and year over year in September, with the Northeast weathering the largest yearly drop.
The Northeast PHSI fell 3.2% to 93.1 in September, an 18.5% decline from a year ago. In the Midwest, the index dropped 3.5% to 111.4 last month, down 5.8% from September 2020. Sales transactions in the South decreased 1.8% to an index of 139.1, down 5.8% from September 2020. The index in the West declined 1.4% to 105.3, down 7.2% from a year prior.
Once all data has been tabulated by year’s end, NAR expects home sales to have risen by 6.4% in 2021. But due to higher anticipated mortgage rates, NAR projects sales to then decline by 1.7% in 2022. Yun says home prices will moderate with only 2.8% growth in 2022 after a double-digit price gain of 14.7% in 2021.
