NAR: Pending Home Sales Index Drops 0.6% to 102.1 in October

Pending home sales fell 0.6% to an index reading of 102.1 in October, after a revised 4.6% decline to 102.7 in September, according to a report released Monday by the National Association of Realtors.

The September reading was initially reported as 5.6% drop to 101.6. The October decline was the fifth straight drop in the index.

Economists polled by Thomson Reuters predicted that the index would be up 1.3%.

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 1.6% from last October, when the index was 103.8.

Regionally, pending sales were lower. The Northeast saw a 2.8% rise to 85.8, while sales grew 1.2% in the Midwest to 104.1. In the South, sales dipped 0.8% to 114.5, and sales declined 4.1% to 93.3 in the West.

"The government shutdown in the first half of last month sidelined some potential buyers," NAR Chief Economist Lawrence Yun said. "In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval."

The future may be difficult. "We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions. Job creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors," he added.

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