Pending home sales in the United States inched up slightly in September marking the fifth consecutive monthly rise in the index this year and the second highest level since last year, according to the latest report by the National Association of Realtors.
NAR's pending home sales index rose 0.3 percent to 105 in September from August's 104. The figure is also up one percent above the figures recorded at the same time last year.
The Pending Home Sales Index increased the most in the South at 1.4 percent to 118.5 in September, which is 1.7 percent above last year's. The Northeast also posted a 1.2 percent increase in the index. The PHSI, however, inched down in the Midwest and the West by 1.2 and 0.8 percent, respectively.
NAR experts attributed the slow growth in the pending home sales index to still-tight inventory and high credit standards. But, the improving supply and lower mortgage rates should help boost buying activity in the market, they added.
"Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year. Additionally, the current spectacularly low mortgage rates should help more buyers reach the market," Lawrence Yun, chief economist at NAR said, in a statement.
Prices in the country have indeed been rising at a stifled pace. A separate report by RealtyTrac showed that media prices rose by less than 10 percent in 59 of the 102 metro areas analyzed on a year-over-year basis. The pace of appreciation has dropped down to single-digits.
"We are experiencing the normal seasonal slowdown, but the market is still very strong in Northern Colorado. Our feeling is that prices will not deflate but rather level off at least until spring," Doug Dodds with RE/MAX Alliance told RealtyTrac.
Experts are hoping that the leveled-off prices will help boost buying activity by the end of the year despite the seasonal slowdown, according to the Wall Street Journal.
More recently, Zillow released its real estate report for the third quarter highlighting that the market was returning to normal. Read more of that report here.
