The number of consumers who signed contracts to buy homes dropped sharply in the Albuquerque metro area and the country as a whole in September, reflecting higher mortgage rates and home prices that have made purchases more costly.
There were 889 pending home sales in September in the Albuquerque metro area down 12 percent from 1,011 pendings a month earlier and 1,158 the month before that, the Greater Albuquerque Association of Realtors reported.
The number of contract signings was close to September 2012 data of 884, GAAR reported.
Actual September home sales in the Albuquerque metro area, although down from the previous month, were strong — an 18 percent increase — compared to a year earlier, the association said.
Prices continue to show slight improvement. The median sales price improved by 3.2 percent to $177,500. Sales of homes in higher price ranges saw improvement with price ranges of $250,000 and above increasing 22 percent over September of 2012.
The National Association of Realtors said Monday that its seasonally adjusted pending home sales index fell 5.6 percent last month from August to a reading of 101.6. The decline pushed the index below its year-ago level, the first time that’s happened in nearly 2 ½ years.
There is generally a one- to two-month lag between a signed contract and a completed sale. The drop suggests final sales will decline in the coming months.
Mortgage rates reached a two-year high in August and remained elevated in September. But they have fallen in the past month, which could help boost contract signings in October. The average rate for a 30-year mortgage was 4.13 percent last week, according to mortgage buyer Freddie Mac.
Home prices, meanwhile, jumped 12.4 percent in August compared with a year earlier, according to real estate data provider CoreLogic. That’s near the fastest pace in seven years.
Many economists still believe the housing recovery should continue, albeit with slower gains in home sales. They note that home prices and mortgage rates remain low by historical standards.