A lack of inventory drove down pending home sales for the third time in four months to the lowest level in seven months.
After making adjustments for seasonal factors, the Pending Home Sales Index came in at 108.5 for the month of August.
The index,
a forward-looking indicator based on contract signings, fell from the downwardly revised 111.2 the prior month.
Historical data from the National Association Realtors, which released the latest numbers Thursday, indicate pending home sales have declined three out of the past four months.
In addition, last month’s index was the lowest since January.
Pending home sales also retreated from the same month last year, when the index stood at a downwardly revised 108.7.
NAR Chief Economist Lawrence Yun explained in the report that weak supply stifled the momentum experienced earlier this year in the housing market.
“An increased number of prospective buyers appear to be either wavering at the steeper home prices pushed up by inventory shortages or disheartened by the competition for the minuscule number of affordable listings,” Yun stated.
In the West, the Pending Home Sales Index was 102.8 as of last month, down
from July by 5 percent — more than any other region.
Next was the South, where the index fell 3 percent to 119.8 in August, then a 1 percent decline to 104.7 in the Midwest.
The Northeast was the only region where
a there was a month-over-month increase in the index — 1 percent to 98.1.
Yun noted that a higher inventory helped the Northeast.
