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 The National Association of Realtors said Monday that its seasonally
adjusted pending home sales index dipped 0.6 percent to 102.1.
That's the lowest level since December. September's reading was
revised slightly higher to 102.7.
There is generally a one- to two-month lag between a signed contract
and a completed sale. The drop suggests final sales will remain weak
in the coming months.
The Realtors' group said the shutdown prevented the IRS from
verifying incomes, a critical part of the mortgage-approval process.
The group said that 17 percent of Realtors reported delays.
Sales may rebound a bit in November as purchases delayed by the
shutdown are completed. But sales are not expected to pick up much
after that.
"The recovery in home sales has clearly at least stalled," said Jim
O'Sullivan, chief U.S. economist with High Frequency Economics, a
forecasting firm. "With other data showing the recovery in the labor
market still on track, and confidence moving up again, we expect
home sales to start trending up again in coming months."
A limited supply of homes has pushed up prices in the past year.
Prices of existing homes jumped 12 percent in September from the
previous year, according to real estate data provider CoreLogic.
Signed contracts fell sharply in the West, where investors have
snapped up foreclosed homes and bid up prices in the past year.
Signed contracts also slipped in the South, another area hit hard
during the crisis.
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But contracts rose last month in the Northeast and Midwest.
Mortgage rates have eased but remain nearly a point higher than they
were in the spring. The average rate on a 30-year mortgage fell to
4.22 percent last week from 4.35 percent the week before. That's
down from a peak in August of nearly 4.6 percent and still low by
historical standards.
Last week, the Realtors said sales of existing homes fell 3.2
percent in October to a seasonally adjusted annual rate of 5.12
million, down from a pace of 5.29 million in September and the
slowest since June. Sales at an annual rate of about 5.5 million are
consistent with a healthy market.
Sales should rise about 10 percent this year to 5.1 million, the
Realtors' group predicts. About 4.67 million homes were sold in
2012. But it expects sales will be roughly flat next year.
[Associated
Press; CHRISTOPHER S. RUGABER]
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