Signed contracts to buy existing homes dropped 2.3 percent in September from August and were just 3 percent higher than one year ago, according to the National Association of Realtors.
The August read of the Realtors' Pending Home Sales Index was revised down slightly. Analysts had expected a slight gain for the month. This is the second-straight monthly drop and is the second-lowest reading of the year. Pending sales are a forward-looking indicator of closed sales for the next two months.
"There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and Realtors in many areas are reporting stronger competition than what's normal this time of year because of stubbornly-low inventory conditions," Realtors' chief economist Lawrence Yun said in a statement. "Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach."
Sales dropped across the nation, with the weakest reading in the Northeast. Sales there fell 4.0 percent in September from August. In the Midwest, pending home sales declined 2.5 percent and were 2.6 percent lower in the South. The West was nearly flat, with sales down just 0.2.
The read on contracts caps off some mixed September housing data. Closed sales of existing homes rose more than expected while contracts to buy newly built homes dropped dramatically. Housing starts were strong, but mostly led by multifamily construction. Home prices are also still rising far faster than income growth.
Real estate brokerage Redfin reported flat demand in September compared to a year ago, the weakest read of 2015.
While the number of Redfin customers writing offers was up 10 percent from last year, growth in the number of customers requesting home tours slowed to 23 percent from 31 percent in August. Over the summer, Redfin reported that more people were touring homes but fewer were making offers.
"We're bullish on sales for the remainder of 2015," said Nela Richardson, Redfin's chief economist. "Though we think buyers have had enough of over-the-top pricing."