The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, fell this month due to poor economic conditions after a strong gain in August, according to the National Association of Realtors.
Pending home sales stood at 89.2, down 4.6 percent from an upwardly revised reading of 93.5 in August. However, that is 1.6 percent higher than September 2007's reading of 87.8.
"The month-to-month weakening in pending home sales is understandable, but because the index remains above year-ago levels it means weOre still in a broad period of stabilization," said Lawrence Yun, NAR chief economist. "Conditions remain mixed around the country, but markets that are showing annual sales gains include Long Island, N.Y.; Boston; Minneapolis; Denver; and Washington, D.C., in addition to consistent solid gains in California and Florida."
The index in the West rose 3.7 percent to 113.6 in September and is 39.5 percent above a year ago. In the Midwest the index fell 0.7 percent to 83.3 and is 3.1 percent below September 2007. The index in the South fell 7.9 percent to 89.0 and is 11.3 percent below a year ago. In the Northeast, the index dropped 16.8 percent to 66.4 and is 9.4 percent below September 2007.
Existing-home sales are expected to total 5.02 million in 2008, rising to 5.32 million next year and 5.62 million in 2010.
New-home sales will likely total around 487,000 in 2008 and 413,000 in 2009 before hitting 520,000 in 2010. Housing starts, including multi-family units, will probably total 936,000 units in 2008 and 781,000 next year and then jump to 886,000 in 2010.