Pending home sales fell 5.6% to an index reading of 101.6 in September, after a revised 1.6% decline to 107.6 in August, according to a report released Monday by the National Association of Realtors.
The August reading was initially reported as 1.6% drop to 107.7. The September decline was the fourth straight drop in the index, and the first time in 29 months that the index wasn't better than year-ago levels, which suggests lower home sales in the final quarter of 2013 and a flat trend for next year.
Economists polled by Thomson Reuters predicted that the index would be up 0.1%.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is off 1.2% from last September, when the index was 102.8.
Regionally, pending sales were lower. The Northeast saw a 9.6% slide to 76.7, while sales fell 8.3% in the Midwest to 102.3. In the South, sales dipped 0.4% to 116.2, and sales declined 9.0% to 97.3 in the West.
"Declining housing affordability conditions are likely responsible for the bulk of reduced contract activity," NAR Chief Economist Lawrence Yun said. "In addition, government and contract workers were on the sidelines with growing insecurity over lawmakers' inability to agree on a budget. A broader hit on consumer confidence from general uncertainty also curbs major expenditures such as home purchases."
Inventory shortages, he said, will slowly push up home prices next year.
