The Pending Home Sales Index declined for the fourth straight month, down 5.6% to 101.6 for September, according to a National Association of Realtors (NAR) report released today.
After dropping 1.6% for August, September's index had been expected to stay at the same level. Current pending home sales are at their lowest point since December 2012, and are down 1.2% in the past 12 months.
The index is based on contract signings (with sales usually finalized one or two months later) and is benchmarked to 2001 contract activity. An index of 100 is equal to the average level of contract activity during 2001, which was the first year the association examined data.
NAR chief economist Lawrence Yun noted that the then-looming threat of a government shutdown may have influenced September's results. "Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity," Yun said in a statement today. "In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers' inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases."
Looking ahead, the National Association of Realtors expects the median existing-home price to increase 11% to 11.5% for 2013 overall, boosted largely by consistent inventory shortages, while existing-home sales are expected to grow 10% for the year.