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US pending home sales lower for 4th straight month

Real estate agent Maurice Dolan places an open house sign in front of a home for sale on July 30, 2013 in San Francisco, California
Real estate agent Maurice Dolan places an open house sign in front of a home for sale on July 30, 2013 in San Francisco, California

US pending home sales fell for the fourth straight month in September, as higher interest rates continued to hit potential buyers, the National Association of Realtors (NAR) reported Monday.

NAR's index of the annual rate of pending sales, which points to the pace of actual sales in the coming months, dropped from a downwardly revised 107.6 in August to 101.6 last month, its lowest level since December 2012.

The index was 1.2 percent lower than a year ago.

"This tells us to expect lower home sales for the fourth quarter, with a flat trend going into 2014," said Lawrence Yun, NAR chief economist.

The NAR blamed the slowdown on higher mortgage interest rates and higher home prices. Home loan rates surged more than one percentage point from May to July after the Federal Reserve signaled it was likely to slow its stimulus program for the economy.

But rates eased in September and October as the Fed held off from the much-expected "taper" and the 16-day partial government shutdown in the first half of this month likely took some strength from economic growth.

Yun said the shutdown contributed to general uncertainty that "curbs major expenditures such as home purchases."

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