After hearing bad news from the housing market came out last month as a result of the hurricanes, people hoped for better things this month. Unfortunately, it doesn’t look like their wishes will come true.
According to Reuters:
Contracts to buy previously owned homes were flat in September and activity declined on an annual basis for the fifth time in the last six months as demand for properties continued to exceed supply.
This issue is completely independent from the disaster related problems the housing market is experiencing. This problem has its roots in another issue.
Home sales have weakened amid tight inventories while builders have cited shortages of land and labor as a curb on construction.
With the slower winter months ahead, investors should not expect any sudden changes in the market either.
[NAR chief economist Lawrence Yun] added the situation will likely be further exacerbated as inventory starts to decline heading into the winter months.
In an economy where the housing market is intrinsically tied to the economy, such a long streak of poor housing sales should be worrisome. We will also have to wait and see how monetary policy and tax reform impact the real estate market. With so much up in the air right now, home buyers should keep in formed so that they can anticipate any price changes that may emerge in the coming months.
To read Reuters’ article about stagnant pending home sales, click here.
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