Pending homes sales drop nationwide, recovery expected in 2011

Pending home sales fell after two monthly gains, signaling an uneven recovery, according to data released today by the National Association of Realtors. The Pending Home Sales Index, a forward-looking indicator, dropped 1.8 percent to 80.9 based on contracts signed in September. However, the index remained 24.9 percent below September 2009, when it surged to 107.8 since first-time buyers were taking advantage of the initial deadline for the tax credit last November. NAR attribute the changes to a combination of market factors. “Existing-home sales have shown some improvement, but the foreclosure moratorium is likely to cause some disruption and contribute to an uneven sales performance in the months ahead,” said Lawrence Yun, chief economist at NAR. “Nonetheless, there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves.” Yun also predicted that existing home sales will gradually rise in 2011 to 5.1 million, up from about 4.8 million last year, with some dips along the way. TRD