The high prices of homes as well as low inventory have kept homebuyers away from the market in October.
Contracts to buy existing homes were at an all-time low from September with only 0.2 percent gain in October. The figures were from the National Association of Realtors' monthly index of pending sales, an article from CNBC revealed.
Actually this number is an improvement as pending sales have decreased significantly from the previous months. Pending sales of homes are around 3.9 percent which is higher than what was in October 2014. These numbers are forward-looking indicator of closed sales for the months of November and December.
According to Lawrence Yun, the Realtors' chief economist, "Contract signings in October made the most strides in the Northeast, which hasn't seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country," he continued "In the most competitive metro areas -- particularly those in the South and West -- affordability concerns remain heightened as low inventory continues to drive up prices."
The slump is very noticeable after a busy spring when there was strong growth in job opportunities in some industries. This has proved that there was an overall improvement from last year. The industries that have had shown improvement are oil-related.
Home prices in September were actually higher compared to last year at 5.5 percent according to Black Knight Financial, one of the financial leaders in the region.
Prices are also strengthened by lack of supply. There were fewer homes for sale in October compared to last year. As forecasted, there will be just 3 percent more sales in 2016 than this year, possibly because of a reduction in inventory and rising prices.
There was pending home sales which has increased by 4.5 percent month-to-month for regions located in the Northeast and by 1.7 percent in the West.
Home sales fell also by 1 percent for Midwest homes and by 1.7 percent for properties in the South.