"Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget," said Lawrence Yun, chief economist for the NAR. "Even with existing-housing supply barely budging all summer and no relief coming from new construction, contract activity is still higher than earlier this year and a year ago."
Home prices in July were 5.3 percent higher than July of 2014 and are now just 5.5 percent below their peak from June of 2006, according to a new report from Black Knight Financial Services. After rising through most of the spring, mortgage rates came down slightly in August, but not enough to entice more buyers into the competitive market. The potential for higher rates is just one of several concerns Realtors now cite.
"The possibility of a government shutdown and any ongoing instability in the equity markets could cause some households to put off buying for the time being," wrote Yun in a release. "Furthermore, adapting to the changes being implemented next month in the mortgage closing process could delay some sales."
Starting October 3, new government regulations will require lenders to disclose more documents to borrowers regarding new loan applications. While the regulations have already been delayed in order to give lenders more time to comply, there is still concern that the new rules will delay or even scuttle some sales. Some lenders are counseling potential buyers to extend their rate locks, even if it costs extra money, to protect themselves against possible delays.