Pending Home Sales Continue to Drift Down in September

Pending a recovery in consumer confidence, existing home sales are likely to show only modest growth over the remainder of 2011.

Pending homes sales continued to drift down in September, with the National Association of Realtors Pending Home Sales Index falling 4.6 percent to 84.5. This follows month-to-month declines of 1.2 in August and 1.3 percent in July.

Since PHSI is a forward-looking indicator based on contract signings, September decrease suggests existing home sales are likely to continue their downward trend during the next few months. This comes after a 3 percent drop in September and a cumulative decline of 9 percent since January 2011.

Results were generally consistent across the regions, with the PHSI down 6.2 percent in the Midwest, 5.5 percent in the South, 4.7 percent in the Northeast, and 2.1 percent in the West.

According to NAR the housing market is being excessively constrained. A combination of weak consumer confidence and continuing tight lending criteria held back buyers. Consumer confidence has plummeted in recent months.

- Courtesy of NAHB