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Pending Sales Slip to Lowest Reading in Nearly a Year

Pending home sales slipped a bit further in October, reflecting an overall declining trend amid mixed regional numbers.

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The ""National Association of Realtors'"":http://www.realtor.org/ (NAR) ""Pending Home Sales Index"":http://www.realtor.org/news-releases/2013/11/october-pending-home-sales-down-again-but-expected-to-level-out (PHSI), a forward-looking sales indicator based on contract signings, was 102.1 in October, a drop of 0.6 percent from September's revised level of 102.7.

It was the fifth consecutive monthly decline. Compared to October 2012, the PHSI was down 1.6 percent, NAR reported.

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""The government shutdown in the first half of last month sidelined some potential buyers,"" said NAR chief economist Lawrence Yun. ""In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval.""

While the market could still rebound from October's level--the lowest since last December--limited inventory and deteriorating affordability stand in the way, Yun said. January's new mortgage rules and the threat of another government shutdown present more cause for concern.

However, he noted ""[j]ob creation and a slight dialing down from current stringent mortgage underwriting standards going into 2014 can help offset the headwind factors.""

Two regions reported modest increases in pending sales. The PHSI for the Northeast rose 2.8 percent from September to 85.8; in the Midwest, pending home sales were up 1.2 percent to 104.1.

The South and West both experienced declines as they continued to struggle with higher costs and lower inventory. The South's PHSI fell 0.8 percent month-over-month to an index of 114.5, while the West's index decreased 4.1 percent to 93.3.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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