[WASHINGTON] Pending home sales reversed two months of falls with a slight gain in October, as tight supplies keep a damper on home buying, the National Association of Realtors reported Monday.
NAR's pending home sales index, which measures the pace of contract signings, rose 0.2 per cent to 107.7, up 3.9 per cent from a year ago though still nearly five points below the year's high.
Buyer demand continues to be supported by low interest rates, but tight supplies are keeping prices for homes high and causing buyers to baulk, said NAR chief economist Lawrence Yun. Average prices have risen more than five per cent from last year.
"Contract signings in October made the most strides in the Northeast, which hasn't seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country," Yun said in a statement.
"In the most competitive metro areas - particularly those in the South and West - affordability concerns remain heightened as low inventory continues to drive up prices." NAR is forecasting an annual existing-homes sales pace of about 5.3 million at the end of 2015, which would be the best year since 2006, just before the housing market crash.
Sales growth will slow slightly, to about 3.0 per cent, in 2016, as prices continue to climb.
"Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home," Yun said.