Pending homes sales reversed the slight increase it made last month, posting a meager decline in October but still above year-over-year levels for the second straight month, the National Association of Realtors said.
The Pending Home Sales Index marginally dropped 1.1% to 104.1 in October from an upwardly revised 105.3% in September. This is still 2.2% higher than October 2013’s 101.9.
The index is above 10, which is considered an average level, for the sixth straight month.
“Despite October's modest decline, contract signings have remained at a healthy pace now for six straight months,” said Lawrence Yun, NAR chief economist.
"In addition to low interest rates, buyers entering the market this autumn are being lured by the increase in homes for sale and less competition from investors paying in cash," he said. "Demand is holding steady but would be more robust if it weren't for lagging wage growth and tight credit conditions that continue to hamper those individuals looking for relief from rising rents."
Meanwhile, the median existing-home price for all housing types in October was $208,300, which is 5.5% above October 2013. Monthly median price growth has averaged 5.8% in 2014 (through October) after averaging 11.5% last year.
"The increase in median prices for existing-homes has leveled off, representing a healthier pace that has kept affordability in-check for buyers in many parts of the country while giving more previously stuck homeowners with little or no equity the ability to sell," said Yun.
Regionally, the PHSI in the Northeast slightly increased 0.5% to 87.9 in October, and is now 3.4% above a year ago.
In the Midwest the index slightly declined 0.6% to 100.6 in October, and is now 3% below October 2013, while pending home sales in the South decreased 1% to an index of 118.3 in October, but is still 3.9% above last October.
The index in the West fell 3.2% in October to 98.1, but remains 4.1% above a year ago.