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The Pending Home Sales Index (PHSI), published by the National Association of Realtors (NAR), registered 106.8 in September, the second lowest level this year. September’s level was a 2.3 percent slip from the slightly downwardly revised 109.3 in August but a three percent spike from 103.7 level in September. The index registered month-over-month declines in the Northeast, South and Midwest, with the West managing a miniscule 0.2 increase.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and Realtors in many areas are reporting stronger competition than what’s normal this time of year because of stubbornly-low inventory conditions,” said NAR Chief Economist Lawrence Yun. “Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach.”
While pending home sales fell, so did mortgage rates. The new Freddie Mac Primary Mortgage Market Survey (PMMS) for the week ending Oct. 29 found the 30-year fixed-rate mortgage (FRM) averaged 3.76 percent with an average 0.6 point, down from last week’s 3.79 percent average and down from the 3.98 percent average of a year ago. The 15-year FRM this week averaged 2.98 percent with an average 0.6 point, unchanged from last week and below the 3.13 percent average of a year ago.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.89 percent this week with an average 0.4 point, unchanged from last week and below the 2.94 percent average of last year. And the one-year Treasury-indexed ARM averaged 2.54 percent this week with an average 0.2 point, down from 2.62 percent last week but above the 2.43 percent of last year.
"Treasury yields oscillated without a clear direction heading into the October FOMC meeting, as investors were confident there would be no rate increase,” said Sean Becketti, chief economist at Freddie Mac, referring to the policy-setting arm of the Federal Reserve. “While the FOMC left rates unchanged at this meeting, they kept a December rate hike as an option causing Treasuries to sell off in the latter part of the day, after our survey closed."