Pending Home Sales Unexpectedly Slide In October, High Prices Blamed

Today’s pending home sales data  (expected to rise modestly MoM) is October’s tie-breaker after new home sales dipped and existing home sales ripped. After unexpectedly dropping in September, pending homes also unexpectedly fell in October (down 1.1% MoM vs +1.0% MoM exp).

Source: Bloomberg

This is the second monthly decline in a row.

“The housing market is still hot, but we may be starting to see rising home prices hurting affordability,” Lawrence Yun, chief economist at the NAR, said in a statement.

The combination of low rates, lean inventory and “very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers.”

On a YoY basis, sales remained impressive (up 19.5%) but that also slowed.

Source: Bloomberg

By region, pending home sales declined in two of four major U.S. regions, including a 5.9% decrease in the Northeast and a 0.7% drop in the Midwest. The gauge of contract signings in the South crept up 0.1%, while the index was unchanged for the West.