Rising home prices and the depleted housing inventory led to another drop in pending home sales, according to the National Association of Realtors.
The index declined 2.3% year-over-year in August and 1.8%
"Pending home sales continued a slow drip downward, with the fourth month-over-month decline in the past five months. With prices having risen so quickly, many consumers were deciding to wait to list their homes hoping to see additional price and equity gains," Lawrence Yun, NAR chief economist, said in a press release.
"However, with indications that buyers are beginning to pull out, price gains are going to decelerate and potential sellers are considering that now is a good time to list and bring more properties to the market," Yun continued.
Broken down by region, the West had the biggest decline in its index of pending sales, dropping 11.3% from a year ago and 5.9% month-over-month. The Northeast followed, falling 1.6% year-over-year and 1.3% from July. The Midwest dipped 1.1% from last year and 0.5% from the previous month. The South had the sole increase with a 1.3% rise year-over-year. However, pending sales fell 0.7% from the month before.
"The greatest decline occurred in the West region where prices have shot up significantly, which clearly indicates that affordability is hindering buyers and those affordability issues come from lack of inventory, particularly in moderate price points," said Yun.
The NAR expects an overall decrease of 1.6% in existing-home sales in 2018 with the median existing-home price increasing 4.8%. Next year's forecast shows existing-home sales rising 2% and home prices growing 3.5%.
