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The numbers: U.S. pending home sales slid 2.6% to a reading of 102.1 in October from 104.8 in September, the National Association of Realtors said Thursday. That was the lowest since June 2014.
What happened: NAR’s index, which tracks real estate contract signings, was down 6.7% compared to a year ago. The report missed the Econoday consensus for an unchanged reading.
Contract signings usually precede closings by about 45 days, so the pending home sales release is considered a leading indicator for the existing-home sales report.
In October, pending sales in the Northeast rose 0.7%. It was the only region to see an increase. In the Midwest, sales fell 1.8%, in the South they fell 1.1%, and in the West they tumbled 8.9%.
Big picture: The housing picture is growing darker. The Realtors trade group now expects sales of existing homes to decline 3.1% in 2018, and another 0.4% in 2019. The group also forecasts home prices will fall 2.5% next year.
What they’re saying: Economists have been mixed on the signals from the housing market, even as the warning signs become harder to ignore.
when new home sales decline and inventory increases, like we've been seeing in recent months, that's typically not a great sign for the economy pic.twitter.com/UnvWdZQ3cq
— Leonard Kiefer (@lenkiefer) November 28, 2018
“By all accounts, we are seeing a buyers’ strike this year, as prospective home buyers have tired of surging home prices, frenzied bidding on scarce homes for sale and most recently rising mortgage rates,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “The slowdown in home-price appreciation in recent months should help to bring the housing market into better balance.”
Market reaction: The 10-year U.S. Treasury yield has backed off in recent weeks, which should offer home buyers a reprieve on mortgage rates, if the demand is still there.
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