Pending home sales remained mostly unchanged in September, but are holding higher than year ago levels.
According to the Pending Home Sales Index (PHSI), an indicator based on contract signings, there was just 0.3 percent upward movement for the month.
Lawrence Yun, NAR chief economist, said pending home sales continue to hold a higher ground. "Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range," Yun said. "This means only minor movement is likely in near-term existing-home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013."
The market is still experiencing many contract cancellations due to appraisals coming in lower than contract prices and from buyers being unable to finalize on a mortgage due to tightened lending standards.
Regionally, the Midwest was the only area to post a decline, falling 5.8 percent for the month. It remains 19.3 percent above last year's contract signings.
The largest increase was seen in the West, which rose 4.3 percent in September to 106.9 on the PHSI. This was followed by the Northeast at 1.4 percent and the South at 1.0 percent. All regions are seeing pending sales rates higher than a year ago, although the West is only 0.8 percent above September 2011 levels.
For now, pending home sales have risen for 17 consecutive months on a year-over-year basis, according to the National Association of Realtors.
"In September all regions were showing double-digit increases in contract activity from a year ago with the exception of the West, which is constrained by limited inventory," they report.
Existing-home sales -- those that have seen contracts through completion -- are up 9 percent and are projected to rise another 9 percent next year to 5.1 million units.
New home sales also posted a gain for the month of September, rising 5.7 percent to a seasonally adjusted annual rate of 389,000 units, according to HUD and the U.S. Census Bureau.
According to the National Association of Home Builders (NAHB) this is the quickest sales pace since April 2010 when first-time home buyers rushed to meet the tax credit deadline.
"Combined with consistent, positive reports on housing starts, permits, prices and builder confidence in recent months, today's data provides further confirmation that a gradual but steady housing recovery is underway across much of the nation," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. "Consumers who have been on the sidelines during the past few years are deciding now is the time to go forward with a new-home purchase, assuming they can qualify for a good mortgage under today's exceedingly stringent guidelines."
NAHB Chief Economist David Crowe says that new home sales this year have risen above year-ago levels and have held steady throughout each quarter. The low inventory of new homes for sale -- at an all time low and the tightest month's supply since October 2005, is an indication of builders having a hard time procuring credit, despite a demand for new housing.
The NAHB reports, "Three out of four regions registered substantial gains in new-home sales this September, including the Northeast's 16.7 percent increase, the South's 16.8 percent increase and the West's 3.9 percent increase. The Midwest was the exception to the rule, with a 37.3 percent decline."