Pending home sales fell 2.6% to an index reading of 102.1 in October, after a revised 0.7% rise to 104.8 in September, according to a report released Thursday by the National Association of Realtors.
An index of 100 is equal to the average level of contract activity during 2001.
September’s figure was first reported as a 0.5% gain to 104.6.
Year-over-year the pending homes sales index decreased 6.7% from last October, when the index was 109.4. This is the tenth consecutive month sales have dropped on an annual basis.
Regionally, pending sales were mostly lower. Northeast sales grew 0.7% to 92.9 and sales slid 1.1% in the South to 118.9. In the Midwest sales declined 1.8% to 100.4, while sales fell 8.9% in the West to 84.8.
While sales declined on an annual basis for 11 months after the taper tantrum in 2013, and then rebounded after interest rates started to slide, “this time, interests rates are not going down, in fact, they are probably going to increase even further,” NAR Chief Economist Lawrence Yun said.
And while the short-term outlook is unclear, Yun remains optimistic long-term. “[M]ortgage rates are much lower today compared to earlier this century, when mortgage rates averaged 8%,” he noted. “Additionally, there are more jobs today than there were two decades ago. So, while the long-term prospects look solid, we just have to get through this short-term period of uncertainty.”
The big drop in the West resulted from a run-up of prices that “has essentially priced out many consumers,” Yun said.
