Shadow housing inventory seen at 1.7 mln in Sept

NEW YORK (Reuters) - The pending supply of homes not yet up for sale jumped in September from a year earlier, data released on Thursday showed, a potential setback for the hard-hit U.S. housing market.

As of September, First American CoreLogic estimated there was a 1.7-million-unit pending supply of residential housing inventory, up from 1.1 million a year earlier.

This inventory could eventually hinder the beaten-down U.S. housing market, which has been showing signs of stabilization after a three-year slump.

Pending supply, which sometimes is referred to as "shadow" inventory, estimates real estate owned, or REO, by banks and mortgage companies, as a result of foreclosures and other actions, such as deeds in lieu, as well as real estate that is at least 90 days delinquent, the company said in a statement.

"Normally shadow inventory would not be included in the official measures of unsold inventory," the company said. "At the current sales rate, the pending supply is 3.3 months, up from 2.4 months a year ago."

The months' supply measures how quickly the inventory will run off given the current sales rate.

First American CoreLogic said the visible supply of unsold inventory, which measures the unsold inventory of new and existing homes that are currently on the market, was 3.8 million units in September, down from 4.7 million a year earlier. The visible months' supply fell to 7.8 months in September, down from 10.1 months a year earlier.

The total unsold inventory, which combines the visible and pending supply, was 5.5 million units in September 2009, down from 5.7 million a year ago. The total months' supply was 11.1 months, down from 12.7 a year earlier, the company said.

"This indicates that while the visible months' supply has decreased and is beginning to approach more normal levels, adding in the pending supply reveals there is still quite a bit of inventory that will impact the housing market for the next few years, especially in the context of the current increase in home sales, which is in part due to artificially low interest rates and the home buyer tax credit," the company said.

More inventory on the market could broaden what is still a huge imbalance between supply and demand. Stabilization of the hard-hit U.S. housing market is key to a turnaround for the United States, so a setback could prolong a rebound for the world's largest economy.

(Editing by James Dalgleish)