The level of pending home sales (exchanged contracts but not completed) in the USA rose by 4.3% in , but has fallen annually by 14.1%, compared to this time last year, according to the National Association of Realtors (NAR).

David Lereah, chief economist for the NAR, said: "Our sense is that home sales may have reached a low in August. With fewer new listings coming on the market, we should be able to draw down the inventory supply early next year to the point where home prices will rise, but at a slower pace than historic norms."

The NAR reported last week that sales of existing homes in the US fell for the fifth month in a row during August with the number of unsold homes on the market continuing to rise.

Professor Peter Morici of the Robert H. Smith School of Business at the University of Maryland said: “Frustrated home owners, under no pressure to sell or relocate for new jobs or retirement, are likely holding houses off the market and waiting for conditions to improve. Those would-be-sellers may have to wait until 2008 or 2009 to see a robust market again.

“Over the last five years, housing values have risen more than 50 percent nationally, outpacing the pay checks of buyers. The housing market is ripe for an adjustment - a year or two of flat or falling prices followed by a period of only modest price gains appears likely.”