Housing took another hit last week with the National Association of Realtors® latest Pending Homes Sales Index report showing that contract signings fells 4.6 percent in September.
The silver lining? This rate is still 6.4 percent above last year at this time.
Lawrence Yun, NAR chief economist, said the housing market is being excessively constrained. “A combination of weak consumer confidence and continuing tight lending criteria held back home buyers, even though the private sector added nearly 2 million net new jobs in the past 12 months,” he said.
He continued, “America’s monetary policy is contradictory and confusing, where some consumers with the best financial capacity and top-notch credit scores pay higher mortgage interest rates,” Yun said. “The Federal Reserve evidently has been attempting to lower mortgage rates, yet more consumers are faced with taking out jumbo loans that carry higher interest rates.”
Yun says higher loan limits must be reinstated in order to start fixing this housing issue.
Regionally, the largest decline was seen in the Midwest, which feel 6.2 percent. This region, however, is still 12.3 percent higher than September 2010.
The next largest decline was in the South, which fell 5.5 percent and is just 5.0 percent above last year’s figures. The Northeast also feel nearly 5.0 percent (down 4.7) and is just 4.0 percent above last’s year sickly numbers. The smallest decline was in the West where rates declined just 2.1 percent. This region sits at 5.6 percent above September 2010.
We’ll keep you posted on the latest sales activity. For now, experts agree that reduced access to credit and a continued ailing jobs market are putting pressure on an already ailing housing market.