NEW YORK - Pending home sales fell 7.6% to a reading of 90.4 in January from a revised 1.0% increase to 97.8 in December, originally reported as a 1.0% gain to 96.6, as November’s index is now reported as 97.0, according to an index released today by the National Association of Realtors.
Thomson Reuters’ poll of economists had predicted a 97.6 reading.
Year-over-year the pending homes sales index was up 12.3% from last January, when the index was 80.5.
Regionally, pending sales were lower. The Northeast saw an 8.7% decrease to 71.3, while sales fell 8.9% to 81.2 in the Midwest. In the South sales dropped 2.1% to 98.1, while in the West, pending sales declined 13.2% to 102.9.
“January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit,” NAR Chief Economist Lawrence Yun said. “Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” he said.
“We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June,” he said. “The real question is what happens in the second half of the year. If there is sufficient job creation, housing can become self-sustaining with stable to modestly rising home prices because inventory has been trending downward.”
