U.S. home buyers signed fewer contracts to buy existing homes in October, even as the number of homes for sale increased.
A monthly index from the National Association of Realtors of so-called pending home sales fell 1.1 percent from an upwardly revised September reading, but is 2.2 percent higher than it was in October of 2013. This is the second straight month of annual gains. These pending sales are an indicator of closed sales one to two months from now.
Meanwhile, inventory of for-sale homes was 5 percent higher in October than it was a year ago, according to the Realtors. The number of listings usually drops in the fall and winter, but more sellers are being drawn into this market now, thanks to higher home prices. Despite the drop in signed contracts, though, the Realtors say home sales remain at a "healthy" pace.
"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 case," said Lawrence Yun, chief economist for the Realtors.