Pending home sales dropped 1.8% to an index reading of 104.2 in August, after a revised 0.8% fall to 106.1 in July, according to a report released Thursday by the National Association of Realtors.
An index of 100 is equal to the average level of contract activity during 2001.
July’s figure was first reported as a 0.7% drop to 106.2.
Year-over-year the pending homes sales index decreased 2.3% from last August, when the index was 106.7. This is the eighth consecutive month sales have dropped on an annual basis.
IFR Markets predicted the index would be down 0.1%.
Regionally, pending sales were lower. Northeast sales fell 1.3% to 92.7, in the Midwest sales declined 0.5% to 101.6, while sales dropped 5.9% in the West to 89.1, and slid 0.7% in the South to 121.3.
“Pending home sales continued a slow drip downward, with the fourth month over month decline in the past five months,” NAR Chief Economist Lawrence Yun said.
“The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points,” he said.
“With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains,” he noted. “However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market.”
