Bloomberg – Princess Laya – Contracts to buy previously owned U.S. homes unexpectedly declined in January as higher mortgage rates, elevated prices and a limited number of listings pushed the index to a one-year low, according to figures released Monday from the National Association of Realtors in Washington.
Pending home sales gauge dropped 2.8 percent (forecast was for 0.6 percent advance), the most since May, to a one-year low of 106.4.
Contract signings rose 0.8 percent in December, revised down from a previously reported 1.6 percent gain
Index increased 2.7 percent from January 2016 on an unadjusted basis
Pending sales decreased in the Midwest and West
Pending home sales, which reflect contract signings, declined in January as affordability became an issue for potential buyers. A pickup in mortgage rates since the November election, higher home prices and fewer properties to choose from are limiting progress in residential real estate. At the same time, steadily increasing wages and a growing economy remain sources of support.
Here is a chart for Pending Home Sales (MoM) courtesy of Zero Hedge (the battery in my Bloomberg Anywhere card died).
And Pending Home Sales have declined with declining mortgage purchase applications (again, courtesy of Zero Hedge).
This is not a good sign. Very frustrating, much like trying to eat “Raw Oyster Stew.”