Pending Home Sales Slow in US

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The National Association of Realtors' Pending Home Sales Index dropped 1.6 percent in August from a month earlier, due to "tight inventory conditions, higher interest rates, rising home prices and continuing restrictive mortgage credit."

But the declines were not universal, the association reports. In the Northeast pending sales increased 4 percent from July, while the index declined 3.5 percent in the South.

NAR's pending sales index tracks contracts, not closing, and is often viewed as a leading indicator of the market.

Overall, the pending sales index was still up 5.8 percent from a year earlier. Pending sales have been above year-earlier levels for 28 consecutive months, the association reports.

The August declines were not a surprise, due to the large number of existing home sales in July, said NAR chief economist Lawrence Yun.

"Sharply rising mortgage interest rates in the spring motived buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized last month," he said. "Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead."

NAR predicts total existing-home sales this year will be up about 11 percent to nearly 5.2 million, but expects "little change" in 2014, with sales forecast to increase less than 1 percent.

"The national median existing-home price should rise 11 to 12 percent for all of 2013, easing to an increase of 5 to 6 percent next year, with general improvement expected in inventory supplies," NAR says.