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Pending home sales rose slightly in September, and are now above year-over-year levels for the first time in 11 months, according to the National Association of Realtors (NAR). The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, inched 0.3 percent to 105.0 in September from 104.7 in August, and is now 1.0 percent higher than September 2013 (104.0). The index is above 100 for the fifth consecutive month and is at the second-highest level since last September.
“Housing supply for existing homes was up in September six percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year,” said Lawrence Yun, NAR chief economist. “Additionally, the current spectacularly low mortgage rates should help more buyers reach the market.”
Despite improved housing conditions and low interest rates, tight credit conditions continue to be a barrier for some buyers. Of the reasons for not closing a sale, about 15 percent of Realtors in September reported having clients who could not obtain financing as the reason for not closing
Yun says the final rule on Qualified Residential Mortgages should improve access to credit once it goes into effect next year. “The rule provides clarity for lenders and is a win for creditworthy consumers by ensuring they continue to have access to safe and affordable loan products without overly burdensome downpayment requirements,” Yun said.
The PHSI in the Northeast increased 1.2 percent to 87.5 in September, and is now 2.9 percent above a year ago. In the Midwest the index decreased 1.2 percent to 101.2 in September, and is now four percent below September 2013.
Pending home sales in the South increased 1.4 percent to an index of 118.5 in September, and is 1.7 percent above last September. The PHSI in the West inched back 0.8 percent in September to 101.3, but is still 3.6 percent above a year ago.