The latest index data from the National Association of Realtors shows that pending sales fell in September for the second month in a row and the index is now at its lowest level of the year.
But a slowdown in the market might be good for the longer term as there continues to be a dearth of available listings in the lower end of the market for first time buyers. Indeed, the NAR report stronger competition than what's normal for this time of year because of stubbornly low inventory conditions.
On top of this, the rockiness in the financial markets at the end of the summer and signs of a slowing US economy may be causing some prospective buyers to take a wait and see approach.
The organisation believes that with interest rates hovering around 4%, rents rising at a near eight year high, and job growth holding strong, albeit at a more modest pace than earlier this year, the overall demand for buying should stay at a healthy level despite some weakness in the overall economy.
Home buyers are also confident about the market. NAR's latest survey found that the majority of people in the United States believe that buying a home is a good financial decision, that now is a good time to buy and that they could sell their home for at least its initial purchase price.
The survey, which measures consumers' attitudes and concerns about housing issues in the nation's 50 largest metropolitan statistical areas, found that more than eight in 10 Americans are positive about the housing market.
Some 68% believe that now is a good time to buy a home, 71% that they could sell their house for what they paid for it, a jump of 16% compared to 2013, showing that home ownership is still part of the American Dream.
The survey also found that the number of renters who are now thinking about purchasing a home has increased since the last survey in 2013, up from 36% to 39and 61% said that owning a home is a priority for their future.
One of the questions facing buyers in a slowing market is what to buy. New research from Zillow shows that condos are appreciating faster than single family homes in markets across the country, especially where job markets are thriving or urban renewal is underway.
Condo prices crashed during the housing downturn but are now growing at a quarterly rate of 5.1% compared to 3.7% for family homes and are appreciating faster than single family homes in nearly two thirds of the top 35 housing markets.
In Denver, for example, condo values are growing in value at an annual rate of just under 20% while single family home values are rising at 15.9% and are increasingly been seen as a good investment. They are also an affordable option for first time buyers and could end up boosting the sales market, but only if prices don't overcook.
Property Wire
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