Rising home prices stateside and a tight supply of homes for sale kept buyers at bay last month.
A monthly index measuring signed contracts to buy existing homes, so-called pending home sales, fell 1.4% in August compared to July, according to the U.S. National Association of Realtors. Expectations had been for a slight increase.
While sales are still 6.1% higher than one year ago, the annual gains are shrinking.
Home prices in July were 5.3% higher than July of 2014 and are now just 5.5% below their peak from June 2006, according to a new report from Black Knight Financial Services. After rising through most of the spring, mortgage rates came down slightly in August, but not enough to entice more buyers into the competitive market. The potential for higher rates is just one of several concerns Realtors now cite.
Starting October 3, new U.S. government regulations will require lenders to disclose more documents to borrowers regarding new loan applications. While the regulations have already been delayed in order to give lenders more time to comply, there is still concern that the new rules will delay or even scuttle some sales. Some lenders are counseling potential buyers to extend their rate locks, even if it costs extra money, to protect themselves against possible delays.
