Pending home sales slip: Flat sales next year?

Pending home sales slip in September, but tight home inventory should still continue to push prices up but at a slower pace, NAR says.

A home for sale in San Diego.(Photo: Gregory Bull, AP)

Story Highlights

• Existing home sales likely to be lower this quarter
• Down for the fourth month in a row
• Higher mortgage rates, higher prices, shutdown are factors

Pending home sales declined in September for the fourth month in a row, a signal to expect lower home sales this quarter and a flat trend going into next year, a trade group said Monday.

The pending home sales index, a forward looking indicator, fell 5.6% to 101.6 in September from a downwardly revised 107.6 in August and is 1.2% below last year's level, the National Association of Realtors says.

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That the index is lower than last year marks the firs time that's occurred in 29 months, NAR says.

"This tells us to expect lower home sales for the fourth quarter," says Lawrence Yun, NAR chief economist. Even so, he expects prices to continue to rise, but at a slower pace -- echoing expectations of many housing watchers and other economists.

Higher mortgage interest rates and home prices curbed consume buying power, NAR says. The government shutdown also played a role, as government and contract workers were on the sidelines.