WASHINGTON (12/2/14)--Pending-home sales fell 1.1% in October on a seasonally adjusted annualized basis, according to the National Association of Realtors, as the pending-home sales index dropped to 104.1, more than reversing September's gain (Economy.com Nov. 26).
Still, September's number was revised upward, cushioning the step back, and the index sits 2.2% above levels seen in October of last year.
Sales performance varied by region, with the Northeast posting the only increase at a 0.5% gain. The West and South recorded 3.2% and 1% declines respectively, and the Midwest experienced a 0.6% step back.
"Institutional investor demand has begun to moderate, which is putting downward pressure on both home sales and house-price growth," according to Brent Campbell, Moody's analyst (Economy.com). "In addition, an increasing proportion of potential homebuyers are still on the sidelines as memories of the recent housing bust weigh on confidence."
All regions except for the Midwest have posted annual gains, with pending-home sales in the West up 4.1% and in the Northeast up 3.9%. The Midwest has seen a 3% decline year-over-year, however.
"Employment and output growth are accelerating, incomes are rising and mortgage rates have dropped near their lowest levels since mid-2013," Campbell said. "The return of homebuyer confidence will be paramount, but all the preconditions for a stronger housing recovery are in place.
"As a result, the outlook for housing demand over the next few years is sanguine."