Weather conditions, increasing home prices and a limited inventory all contributed to a weak monthly showing for the nation’s pending home sales.
As of January 2016, the seasonally adjusted Pending Home Sales Index — a forward-looking indicator based on contract signings — was 106.0.
The index was benchmarked at 100 as of 2001 and
is based on a national sample that represents around a fifth of existing-home sales transactions.
The index — which is reported by the National Association of Realtors — descended from 108.7 in December 2015. The month-earlier figure was revised up from the 106.8 level originally reported.
“While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers,” NAR Chief Economist Lawrence Yun stated in the report. “Additionally, some buyers could be waiting for a hike in listings come springtime.”
Compared to the
upwardly revised level for January 2015, the index has increased by more than a percent.
“Although the index has increased year-over-year for 17 consecutive months, last month’s annual gain was the second smallest (September 2014 at 1.2 percent) during the timeframe,” the trade group stated.
Pending sales in the Midwest declined 4.9 percent, leaving the index there at 101.1.
A 4.5 percent drop in the West put that index at 96.5, while a 3 percent reduction left the Northeast index at 94.5.
The only region to experience an increase was the South, where the index inched up less than 1 percent to 121.1
Without any seasonal adjustments, the national index was
81.4 in January 2016, up 19 percent from December.
