By Michelle Jamrisko | Bloomberg
The number of contracts to buy existing homes rose less than forecast in September, signaling demand will probably plateau heading into the end of 2014.
The pending home sales index increased 0.3 percent after dropping 1 percent in August, the National Association of Realtors said today in Washington. The median projection in a Bloomberg survey of economists called for a 1 percent gain.
Home resales have yet to regain last year’s peak as still-tight credit and low inventories remain hurdles for the industry, which means residential real estate will make a limited contribution to the expansion. The recent drop in mortgage rates and pickup in hiring will probably help underpin demand, even as first-time buyers struggle to enter the market.
Housing “just doesn’t look like it has that stamina to be a significant driver” for growth, said Kim Fraser Chase, an economist at BBVA Research in Houston, who projected a 0.5 percent rise in sales, among the closest in the Bloomberg survey. The housing rebound will probably be “just enough to get by, but not spectacular by any means.”
