Pending home sales fall. Shutdown to blame?(Read article summary)
Pending home sales declined 0.6 percent since September and fell 1.6 percent below the level seen in October 2012, according to the National Association of Realtors.
Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for October showing that pending home sales declined with the seasonally adjusted national index falling 0.6% from September and falling 1.6% below the level seen in October 2012.
Meanwhile, the NARs chief economist Lawrence Yun suggested that the recent government shutdown impacted pending sales as a result of IRS delays in borrower income verification:
"The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval, ... We could rebound a bit from this level, but still face the headwinds of limited inventory and falling affordability conditions. Job creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors,"
The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).