Pending home sales in October dipped 1.1 percent below September’s level but still were 20 percent above October 2019’s volume.
The year-on-year leap shows continued strong demand among buyers, but slackening pending sales reflects both the lack of enough homes up for sale and steep price increases that increasingly shape today’s market, analysts say.
“We may be starting to see rising home prices hurting affordability,” Lawrence Yun, chief economist for the National Association of Realtors (NAR), said in a press release announcing October’s numbers.
Also, the number of homes for sale on 31 October was 20 percent fewer than a year before and reflects a 2.7-month supply of inventory. The industry considers a six-month supply to represent the comfortable balance between supply and demand.
Supply and demand are particularly tight in lower price ranges, the NAR reported.
The tight supply has continued to foster bidding wars and pushed up the median price of a U.S. single-family home to a record $313,000, a 16-percent rise compared to a year earlier.
The scarcity of existing homes has led people to buy new ones, driving October’s new home sales up 40 percent year over year.
“The combination of scarce housing and low [interest] rates, plus very strong demand, has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers, who don’t have the luxury of using housing equity from a sale to use as a down payment,” said Yun.
