Photo credit: Cyndie
The rising cost of US housing is slowing down sales, as buyers find themselves with fewer affordable options.
New figures from the National Association of Realtors show that pending sales dipped in August, with a modest increase in the West offset by declines in all other regions.
The Pending Home Sales Index, decreased 1.4 per cent from July, although sales remain 6.1 per cent higher than a year ago.
Lawrence Yun, NAR chief economist, says that last month saw a “healthy level of activity”, but demand continues to oupace housing supply, pushing up prices and reducing the choices available to house-hunters.
“Pending sales have leveled off since mid–summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” he explains. “Even with existing–housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago.”
Sales are expected to maintain their current pace, although speed bumps are on the horizon, from the possibility of a government shutdown to upcoming changes in the mortgage closing process.
Prices could also play a factor: with demand still higher than supply, the national median existing–home price is expected to increase 5.8 per cent in 2015 to $220,300. Yun forecasts total existing–home sales this year to increase 7 per cent to around 5.28 million, about 25 per cent below the prior peak set in 2005.