Pending home sales have fallen after reaching a two-year peak, according to the National Association of Realtors (NAR).
The highest level of activity was seen back in April 2010, when first time buyers made sure to beat the deadline for the home buyer tax credit.
Lawrence Yun, NAR chief economist, said some volatility can be expected in the monthly readings. “The performance in month-to-month contract signings has been uneven with ongoing shortages of lower priced inventory in much of the country, and across most price ranges in the West, but activity has remained at notably higher levels this year,” Yun said.
Pending sales were down 2.6 percent for the month of August. This decline comes after 16 consecutive months of year-over-year increases and a higher number of closed sales. Currently year-to-date existing-home sales, according to Yun, are 9 percent above the same period last year.
Regionally, gains were experienced only in the Northeast, which rose by a marginal 0.9 percent. Levels are well above last year, rising 19.9 percent.
The Midwest saw a 2.6 percent decline in August, though it remains 19.9 percent above August 2011 levels. The South also slipped, falling 1.1 percent. Levels are 13.2 percent above a year ago. The West saw the sharpest decline, down 7.2 percent. This has left it 4.2 percent below August 2011 levels.
New home sales, on the other hand, held study in the latest report from the U.S. Census Bureau. The pace was 373,000 units in August, virtually unchanged from the month prior.
“New-home sales in August effectively tied the pace they set in the previous month, when they were the strongest we’ve seen in more than two years — so this is really a continuation of the good news we’ve been getting on the housing front,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “Looking at the big picture, sales have been trending gradually upward since the middle of last year as favorable interest rates and prices have driven more consumers to get back in the market for a newly built home.”
Inventory levels continue to play a part in slowed sales. “This latest report indicates that new-home sales continue to run at a steady pace that’s well ahead of what we were seeing this time last year, and at this rate, the third quarter of 2012 is going to be well ahead of the second quarter,” noted NAHB Chief Economist David Crowe. “That said, the razor-thin inventory of new homes for sale is very concerning because it indicates that builders aren’t able to access the credit they need to build new homes as demand for them improves.” The inventory of new homes is at a historic low of 141,000 new units, or a 4.5 month supply at the current sales pace.