The number of signed contracts to buy existing homes dropped 2 percent in September from August, the National Association of Realtors reported.
It was the first month-on-month decline since May, although the number of signed contracts remained 20.5 percent greater than a year earlier.
Analysts blamed high prices, driven up by the shortage of houses for sale, for the decline.
“The benefits of low interest rates have been completely erased by steep price gains, especially in expensive urban markets,” George Rattiu, economist at realtor.com, said in a Wall Street Journal interview. “Wage growth cannot keep pace with rising home prices.”
Sales varied across the country:
In the Northeast, where urban flight from the New York City area drove sales, the number of signed contracts rose 2 percent in September, an annualized rate of 27.7 percent.
In the Midwest, pending sales were off 3.2 percent month on month but still 18.5 percent ahead of the same period in 2019.
In the South, signed contracts decreased in number by 3 percent but were still up 19.6 percent year on year.
Sales in the West slid 2.6 percent on the month but maintained a 19.3-percent gain over the 2019 period.
Many real estate agents see inventories filling back up in spring 2021 on expectations that shutdowns and COVID cases ease.
Sellers who delayed listing their homes this year will enter a less wary market then, joined by 2021’s normal number of sellers, David Fogg, a California realtor, told the Wall Street Journal.
TREND FORECAST: As the housing market slows and the economy drifts deeper into the “Greatest Depression,” we forecast the Federal Reserve will drop interest rates to negative territory to pump it up. The future of housing will depend on how much money is injected into the system by Washington and the Fed. Over the longer term, we forecast falling home prices as economic conditions deteriorate.
