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[WASHINGTON] Contracts to purchase previously owned US homes unexpectedly fell in November, confirming that the industry lost momentum toward the end of the year.
The index of pending home sales dropped 0.9 per cent, after a revised 0.4 per cent gain the prior month, figures from the National Association of Realtors showed Wednesday in Washington. The median forecast of 28 economists surveyed by Bloomberg called for an increase of 0.7 per cent.
The pullback underscores concern raised by the slump in sales of existing homes last month, weakening the real-estate agents' group argument that new mortgage-lending rules caused the slowdown. Rising prices and a limited supply of properties on the market have restrained buyers, making for a slow recovery in housing. "Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months," NAR chief economist Lawrence Yun said in a statement. "Available listings that are move-in ready and in affordable price ranges remain to come by." Estimates in the Bloomberg survey ranged from little change to a rise of 4 per cent. The Realtors' group previously reported an October gain of 0.2 per cent.
Two of four regions saw a decrease, the report showed. That included a 5.5 per cent drop in the West and a 3 per cent decline in the Northeast. Pending sales climbed 1.3 per cent in the South and 1 per cent in the Midwest.
Compared with a year earlier, the index increased 5.1 per cent on an unadjusted basis, after a 2.3 per cent gain in the prior 12-month period.
The pending sales gauge was 106.9 on a seasonally adjusted basis, the lowest since January. A reading of 100 corresponds to the average level of contract activity in 2001, or "historically healthy" home-buying traffic, according to the NAR.
Real-estate agents continue to report "healthy levels of buyer interest" as mortgage rates remain low and hiring is "solid," Yun said in the statement.
Economists consider pending sales a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a deal closes, typically a month or two later. Home resales, which make up more than 90 per cent of the housing market, slumped in November to the lowest level since April last year in part because a change in industry rules lengthened the amount of time it took buyers to close on a deal, the Realtors' data showed on Dec 22.