U.S. pending home sales gauge falls to lowest since 2014

A gauge of contracts to purchase previously-owned U.S. homes unexpectedly declined in January to a more than three-year low, reflecting a shortage of inventories and rising mortgage rates, according to data released Wednesday from the National Association of Realtors in Washington.

Highlights of Pending Home Sales (January) Index dropped 4.7% m/m (est. 0.5% gain) to 104.6, lowest since Oct. 2014, after no change (revised from 0.5% gain) Gauge fell 1.7% y/y on an unadjusted basis after 1.8% y/y drop in Dec. NAR reduced 2018 home-sales forecast to 5.5m from an actual 5.51m in 2017; previously projected an increase.

Key Takeaways The Realtors’ latest forecast for a decline in home sales this year would be the first annual decrease since 2014. The property market is settling into a cooler pace as there aren’t enough affordable listings to choose from. Rising property prices remain a hurdle, and prospective buyers also are facing an acceleration in mortgage costs.

 

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