Americans signed fewer contracts than forecast in September to purchase previously owned homes, a sign the industry’s recovery will be uneven.
The index of pending home resales climbed 0.3 percent after a 2.6 percent drop in August, figures from the National Association of Realtors showed today in Washington. The reading compared with a median forecast of a 2.5 percent gain in a Bloomberg survey of 33 economists.
Tight access to credit and limited progress in reducing unemployment are hurdles for home purchases, even as borrowing rates remain at record lows. Federal Reserve policy makers are purchasing mortgage-backed securities to help spur the industry as part of a monetary policy aimed at bolstering the job market.
“There’s a certain amount of pickup that’s taken place, but I think we have to temper our expectations of what can happen without employment,” Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York, said before the report. “I think the housing numbers will start to stall if you don’t get the labor market improvement.”
Estimates in the Bloomberg survey ranged from gains of 0.5 percent to 4 percent. Compared with a year earlier, the index increased 8.5 percent after a 9.6 percent gain in the 12 months ended in August.
“Home contract activity remains at an elevated level in contrast with recent years, but currently appears to be bouncing around in a narrow range,” Lawrence Yun, chief economist at the Realtors’ group, said in a statement. “With positive underlying market fundamentals, they should continue on an uptrend in 2013.”
Among other reports today, orders for durable goods climbed 9.9 percent in September on a surge in demand for aircraft. Bookings for non-defense capital equipment excluding planes, a proxy for business investment, were little changed after rising 0.2 percent in August, according to the Commerce Department.
Fewer Americans filed applications for unemployment benefits last week, Labor Department figures showed today. Jobless claims declined by 23,000 to 369,000 during the period, in line with forecasts.
Three of four regions showed a gain in pending sales, according to today’s report from the real-estate agents’ group. That included a 4.3 percent rise in the West, a 1.4 percent increase in the Northeast and a 1 percent advance in the South. They dropped 5.8 percent in the Midwest.
Pending home sales are considered a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a contract closes, typically a month or two later, and made up more than 90 percent of the housing market last year.
Purchases of new homes, logged when contracts are signed, rose in September to the highest level in more than two years, the Commerce Department said yesterday. Sales of previously owned U.S. homes decreased from the highest level in two years, the realtors’ group reported on Oct. 19.
Property values also are improving. The S&P/Case-Shiller index of home prices in 20 cities increased more than forecast in July from a year earlier, according to Sept. 25 data from the group, which is set to release the next report on Oct. 30.
Sustained declines in borrowing costs are supporting the industry. The average rate on a 30-year fixed mortgage dropped to 3.37 percent in the week ended Oct. 18, near a record low of 3.36 reported Oct. 4, according to data from McLean, Virginia- based Freddie Mac that dates back to 1971.
The Fed last month announced the third round of large-scale asset purchases, pledging to buy $40 billion a month in mortgage-backed securities as Chairman Ben S. Bernanke called housing “one of the missing pistons in the engine.”
The Federal Open Market Committee, in its last scheduled meeting before the presidential election, repeated yesterday that it would press on with the asset purchases until the labor market improves “substantially.”
Housing’s improvement has extended to some companies like swimming-pool product supplier Pool Corp. of Covington, Louisiana.
“We do see that creeping up gradually over time,” Manuel Perez de la Mesa, the company’s president and chief executive officer, said about new pool construction on an Oct. 18 earnings call.
“People have to view their homes as an investment and not as an expense,” he said. “Once they view that home as an investment, they’ll be more willing to invest in their home whether it’d be in resurfacing the pool, replacing the equipment or again, bigger leap of faith, putting in a new pool.”