Washington, DC, United States (4E) – The number of signed contracts to buy previously owned homes dropped significantly in September for the fourth straight month, as would-be buyers delayed their purchase plans amid rising borrowing costs and uncertainty brought by the political standoff in Washington.
The National Association of Realtors (NAR) index of pending home sales fell 5.6 percent, topping all estimates in a Bloomberg News survey of economists and the biggest fall in over three years, after a 1.6 percent decline in August, according to a report released Monday in Washington. This meant that the gauge fell to its lowest level in 2013.
The decline was largely due to higher interest rates linked to buying a home, and the heated battles over the budget in the U.S. Congress that were prompting a negative outlook among consumers, according to the Realtors’ group.
Last month, mortgage rates reached their highest levels in two years adding to the reluctance of homeowners to put properties up for sale as they wait for prices to rise again, resulting to tight supply. That situation are making some prospective buyers wait in the sidelines that slows the pace of the housing recovery, giving the U.S. Federal Reserve reason to delay the scaling back of its monetary stimulus in this week’s policy meeting.
Sales of previously owned homes sold fell in September, according to NAR last week, though the July and August sales pace remains the best performance since 2009.