U.S. pending home sales unexpectedly decrease in September

The National Association of Realtors (NAR) announced on Thursday its seasonally adjusted pending home sales index (PHSI) fell 2.2 percent m-o-m to 130.0 in September, after an unrevised 8.8 percent m-o-m climb in August.

Economists had expected pending home sales to advance 3.4 percent m-o-m in September.

On y-o-y basis, the index jumped 20.5 percent after a revised 24.3 percent climb in August (originally a 24.2 percent m-o-m surge).

According to the report, three of four regional indices recorded declines in contract activity on a m-o-m basis in September. Pending home sales in the South dropped 3.0 percent m-o-m to an index of 150.1 in September, up 19.6 percent from September 2019. The PHSI in the West decreased 2.6 percent m-o-m to 116.8, up 19.3 percent from a year ago. In the Midwest, the index plunged 3.2 percent m-o-m to 120.5 last month, up 18.5 percent from September 2019. Meanwhile, the Northeast PHSI rose 2.0 percent m-o-m to 119.4 in September, a 27.7 percent advance from a year ago.

"The demand for home buying remains super strong, even with a slight monthly pullback in September, and we're still likely to end the year with more homes sold overall in 2020 than in 2019," noted Lawrence Yun, NAR's chief economist. "With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future."