Contract signings to purchase previously owned U.S. homes unexpectedly declined in August for just the second time this year, signaling residential real estate might have difficulty building on recent momentum.
An index of pending home sales decreased 1.4 percent after a 0.5 percent advance in July, the National Association of Realtors said Monday. The median projection in a Bloomberg survey of economists called for the gauge to climb 0.4 percent.
A scant supply of homes for sale that’s keeping prices elevated is hampering demand. At the same time, historically low mortgage rates and steady employment gains should help underpin the market as the broader U.S. economy battles headwinds from dollar appreciation and slower overseas growth.
“Pending sales have leveled off since mid-summer, with buyers being bounded by rising prices and few available and affordable properties within their budget,” NAR chief economist Lawrence Yun said in a statement.
Estimates in the Bloomberg survey of 37 economists ranged from a decrease of 4.2 percent to an advance of 1.5 percent.
Purchase contracts increased 6.7 percent in the 12 months ended in August after a 7.2 percent annual gain in July on an unadjusted basis, the NAR report showed.
The pending sales index was 109.4 on a seasonally adjusted basis. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.