Pending Home Sales Off 6.5%

Washington, DC, October 2, 2007--Pending sales of existing-homes activity will be dampened near-term as mortgage disruptions continue to impact the housing market, according to the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator, fell 6.5%, 21.5% below the August 2006 index.

Lawrence Yun, NAR senior economist, said the mortgage market impact is quantifiable.

“Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10% of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments.

“The volume of activity we’re seeing today is below sustainable market fundamentals because some creditworthy people are trying to buy homes but can’t because of the credit crunch."

The impact was greater in high-cost markets that are more dependent on jumbo mortgages.  In some areas, as much as 30% of signed contracts were falling through in August when the credit crunch problem peaked.” Yun said.”

The index in the West was down 2.7% in August and was 27.1% below a year ago.  In the Midwest, the index fell 2.9% from July  and is 18% lower than August 2006.  The index in the Northeast fell 8.3% in August and was 18.3% below a year ago.  In the South, the index dropped 9.5% in August and was 21.3% below August 2006.