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Pending Home Sales Dip in October

for-salePending home sales declined month-to-month in October but remained higher than they were a year ago, according to the latest Pending Home Sales Index from the National Association of Realtors (NAR).

NAR reported Wednesday that contract signings nationally decreased 1.1 percent last month, though they were still up 2.2 percent compared to last October.

Despite the monthly drop, Lawrence Yun, NAR's chief economist, said that contract signings have remained at a healthy pace now for six straight months.

"In addition to low interest rates, buyers entering the market this autumn are being lured by the increase in homes for sale and less competition from investors paying in cash," Yun said.

And while demand is holding steady, the market would be "more robust if it weren't for lagging wage growth and tight credit conditions that continue to hamper those individuals looking for relief from rising rents," he said.

The Northeast had the largest uptick in pending home sales, which inched up half a percent in October and are now 3.4 percent above a year ago.

On the flipside, the Midwest index dropped a little more than half a percent in October and is now 3 percent below October 2013. Pending home sales in the South and West also dropped (1 and 3.2 percent, respectively) but still fared about 4 percent better than they did a year ago.

By comparison, though pending sales took a break last month, existing-home sales in October hit their highest point in more than a year, according to NAR. It was the first time in 2014 that monthly sales beat 2013 numbers.

The median existing-home price for all housing types in October was $208,300, which is 5.5 percent above October 2013. Monthly median price growth this year has averaged 5.8 percent through October after averaging 11.5 percent last year.

Yun said the increase in median prices for existing homes has leveled off, which signals "a healthier pace that has kept affordability in-check for buyers in many parts of the country." At the same time, he said, the leveling-off eases the ability to sell for homeowners who for the past few years have been stuck by negative or flat equity.

Earlier this month, NAR also recently released its economic and housing forecast for 2015 and 2016, in which Yun predicted that existing-home sales this year would fall slightly below 2013's total of 5.1 million, but then gradually increase to5.4 million through 2016.

Beyond Yun's predictions, the fact that pending sales were down month-to-month but up year-to-year may signal a downturn in signings as winter sets in. Slower winter sales and signings are the norm, but it's doubtful anyone wants a repeat of last winter, which pummeled much of the country for longer than normal and delayed the spring buying surge by nearly three months.

About Author: Scott_Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

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