\u201cThere is no shortage of buyers seeking homes,” said Dr. Lawrence Yun, chief economist at the National Association of Realtors (NAR), “but a lack of available units continues to drag down the nation\u2019s housing market and overall economy.\u201d <\/p>\n
In response to the pending home sales index (PHSI) dipping 1.7% in October after two months of increases, Dr. Yun continues shining a light on tight inventory levels as a primary (and we would note, plaguing) factor in housing. <\/p>\n
While pending home sales fell slightly from the previous month, they’re actually up 4.4% from October of last year in all regions of America. The PHSI rose in the Northeast 1.9% for the month, and fell 2.7% in the Midwest, 1.7% in the South, and 3.4% in the West. But for the year, the Northeast is up 3.0%, the Midwest rose 1.8%, the South jumped 5.1%, and the West spiked 7.5%.<\/p>\n
This forward-looking indicator tracks contracts signed and is used to gauge the health of the market in coming months. <\/p>\n
Dr. Yun noted that tight inventory is not the only challenge – mortgage rates rose slightly between September and October. \u201cWhile contract signings have decreased, the overall economic landscape remains favorable,\u201d he stated. \u201cMortgage rates continue to be low at below 4% \u2013 which will attract buyers \u2013 employment levels are strong and many recession claims have dissipated.\u201d<\/p>\n
That said, the Mortgage Bankers Association (MBA) reported today that mortgage applications for last<\/em> week are actually up 1.5%, and with fluctuations this mild, there still appears to be optimism in the market. <\/p>\n “Mortgage rates stayed below 4 percent for the second straight week and borrowers responded positively,” said Joel Kan<\/a>, MBA’s Associate Vice President of Economic and Industry Forecasting. <\/p>\n