Pending home sales fell in September after two months of improvement, indicating an unstable housing market recovery is in the works, according to a National Association of Realtors released Friday.
The Pending Home Sales Index, based on contracts signed in September, slipped 1.8 percent from the previous month to 80.9. That’s down 24.9 percent from September 2009 when buyers were jumping into the housing market to take advantage of the now-expired homebuyer tax credit.
“Existing-home sales have shown some improvement but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead,” said National Association of Realtors chief economist Lawrence Yun in a statement. “Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves.
“However, tight credit and appraisals coming in below a negotiated price continue to constrain the market,” he added
Contracts fell in most regions of the country in September, declining 1.7 percent in the Northeast, 5.7 percent in Midwest and 3.5 percent in the South.
The only region that showed improvement in September were the Western states, which reported a 3.5 increase in signed contracts.
The National Association of Realtors expects a modest housing recovery in 2011 as demand for housing increases.
“We’ve added 30 million people to the U.S. population over the past 10 years, but sales are where they were in 2000,” said Yun. “There appears to be a sizable pent-up demand that could come to the market once the economy gathers momentum.”