Home-sale agreements in central Indiana took an 11-percent nosedive in October, continuing a recent streak of declines amid higher mortgage rates and tighter inventories.
Real estate agency F.C. Tucker Co. said Thursday that home buyers notched 1,941 pending sales in the nine-county area last month, down 11 percent from 2,181 sales reached in October 2012.
Although area sales are up 16 percent through the first 10 months of the year, the trend has slammed into reverse in recent months. Year-over-year sales have fallen in three of the last four months, including a 1.6-percent dip in September.
Mortgage rates had been near all-time lows this year through mid-May, but began creeping up in June. They remain low on a historical basis, but not quite the bargain they were in the spring.
The average rate for a 30-year fixed-rate mortgage jumped to 4.38 percent this week, from 4.28 percent last week, according to Bankrate.
“Though a decrease in home sales is typical as we move deeper into the year, consumers may also be hesitant to jump in as they cautiously watch the potential for increasing interest rates,” said Jim Litten, president of F.C. Tucker Company. “Still, we expect prices to continue rising due to the smaller supply of homes across Central Indiana—a positive sign of market stabilization.”
Marion County posted the highest pending sales in the area, with 821 agreements on October. However, that was an 11.3-percent decline from 926 sales in the same month last year.
On a percentage basis, Hamilton and Morgan counties were the biggest losers. Morgan sales dropped from 86 to 66, for a 23.3 percent loss. Hamilton sales fell 21.7 percent, from 461 to 361.
Madison County was the best performer, increasing sales 9.3 percent in October to 141 agreements. Sales also were up in Johnson County, rising 5.7 percent to 185.
Available homes for sale in the region dropped 6.7 percent, from 12,232 in October 2012 to 11,410 last month. The average price rose about $10,000—from $155,947 to $165,510.
One home in the area that pended in October was priced more than $2 million, and four were priced between $1 million and $2 million. Fifty-two were priced between $500,000 and $1 million.