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US pending home sales post surprise drop in October

[WASHINGTON] Contracts to buy previously-owned US homes unexpectedly fell in October, dropping to their lowest level in four months and casting a shadow over the housing market's recovery.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, dropped 1.1 per cent to 104.1.

Economists polled by Reuters had forecast pending home sales rising 0.5 per cent last month. These contracts become sales after a month or two. Contracts rose in the Northeast, but fell in the South, West and Midwest.

Compared to October of last year, contracts were up 2.2 per cent. The level of contracts signed in September was revised slightly higher.