A drop in the nation’s pending home sales last month is a bad sign for upcoming home sales. The West led the decline.
As of January, the Pending Home Sales Index, an indication of future home sales, was a seasonally adjusted 106.4.
That turned out to be the lowest level for the index in the last 12 months — pointing to lower completed home sales ahead.
The National Association of Realtors reported the index Monday.
“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” NAR Chief Economist Lawrence Yun said in the report. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago.”
The index retreated by nearly 3 percent compared to the upwardly revised level as of the final month of last year.
But a less than 1 percent increase was recorded from
the level as of the first month of last year.
With an index of 94.6, pending sales in the West retreated from December by 10 percent — the largest month-over-month decline of any region.
The index in the Midwest fell 5 percent to 99.5 percent.
But in the South, the index was 122.5 in January, up less than a percent. A 2 percent rise in the Northeast left the index there at 98.7.
