Pending home sales posted a slight monthly pullback in September after four straight months of contract activity growth.
Contract signings dipped 2.2% month over month to 130 in September, but were still 20.5% higher than the last year's reading, according to the National Association of Realtors' Pending Home Sales Index (PHSI).
NAR Chief Economist Lawrence Yun said that, despite the decline, we're still likely to end the year with more homes sold overall in 2020 than in 2019.
"With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future," he said. "Additionally, a second-order demand will steadily arise as homeowners who had not considered moving before the pandemic begin to enter the market. A number of these owners are contemplating moving into larger homes in less densely populated areas in light of new-found work-from-home flexibility."
Pending home sales regional breakdown
All four regions recorded significant year-over-year gains in September. On a month-over-month basis, only the Northeast posted decreases in contract activity.
The Northeast PHSI rose 2% to 119.4 in September, up 27.7% from a year ago. In the Midwest, the index dropped 3.2% to 120.5 last month, but was up 18.5% from September 2019.
Pending home sales in the South fell 3% to 150.1 in September, but were up 19.6% from September 2019. The index
in the West declined 2.6% in September to 116.8, but was up 19.3% from a year ago.