US pending home sales decline in January

“Additionally, some buyers could be waiting for a hike in listings come springtime”.

“While pending home sales have been weak lately, some other housing indicators, including the mortgage purchase application data reported through most of February have looked strong, giving us hope the housing market is continuing to recover”, said Daniel Silver, an economist at JPMorgan in NY.

Yun said that while rising home values may entice more homeowners to sell, supply and affordability conditions “won’t meaningfully improve until homebuilders start ramping up production – especially of homes at lower price points”.

“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors”, Yun says.

In comparison to a year ago the PHI stood 1.4% higher, its second-smallest annual gain over the last 17 months. They plunged 4.9 percent in the Midwest, but rose 0.3 percent in the South. Contracts decreased 4.5 percent in the West, which has seen a rapid increase in home prices amid tight inventories.

The pending home sales index showed mixed regional results in January. The national median existing home price for all of this year is expected to rise by 4.0% to 5.0%. The only region reporting an increase in activity was the South, where signings rose a modest 0.3 per cent.

The NAR predicts around 5.38 million existing home sales this year.

A January slowdown in signed contracts for the sale of existing homes is being pegged to low inventory rather than being any sign of a faltering economy.

The consensus estimate called for a month-over-month increase of 0.5% in pending sales.

Contracts to buy previously owned U.S. homes fell to their lowest level in a year in January amid a persistent shortage of properties for sale, which could slow the housing market before the spring selling season. An index of 100 is equal to the average level of contract activity during 2001, which the NAR considers a “normal”, or balanced, market. This and other news releases are posted in the “News, Blogs and Videos” tab on the website.