The number of people who signed contracts to buy homes fell in September after two months of gains.
The National Association of Realtors said recently that its index of sales agreements for previously occupied homes dropped 1.8% in September to a reading of 80.9. Contract signings fell in every region of the country except the West.
The setback highlighted the continued problems facing the housing industry as it struggles to mount a sustained recovery from a deep recession.
Analysts said some of the weakness in September probably reflected disruptions in the housing market caused by moratoriums imposed by banks on mortgage foreclosures. Banks halted tens of thousands of foreclosures as they investigated allegations that some foreclosures involved flawed legal documents.
The index of pending home sales provides an early measure of sales activity. There is usually a one- to two-month lag between a sales contract and a completed deal.
A reading of 100 indicates that average level of sales activity in 2001, when the index started. The reading was above the 100 threshhold from March 2003 through April 2007 and then sank as the country fell into a deep recession — a downturn led by the bursting of a bubble in housing, as sales of new and previously owned homes fell sharply.
With the drop in September, the index stands 25% below its level of 107.8 in September 2009, when the index surged due to a home-buyer tax credit. A year ago, first-time buyers were rushing to take advantage of the initial deadline for the tax credit. Congress extended the credit through April 30 this year, another deadline that spurred a surge in sales, but then was followed by a slump.