U.S. Pending Home Sales Essentially Unchanged In January

(RTTNews) - After reporting a sharp drop in pending home sales in the previous month, the National Association of Realtors released a report on Friday showing that pending home sales in the U.S. were essentially unchanged in the month of January.

NAR said its pending home sales index inched up 0.1 percent to 95.0 in January after falling 5.8 percent to a revised 94.9 in December. Economists had been expecting pending sales to show a stronger rebound of about 2.3 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Despite the modest monthly increase, the pending home sales index is 9.0 percent below the reading of 104.4 seen in January of 2013.

"Ongoing disruptive weather patterns in much of the U.S. inhibited home shopping," said NAR chief economist Lawrence Yun. "Limited inventory also is playing a role, especially in the West, while credit remains tight and affordability isn't as favorable as it was a year ago."

The modest uptick by the pending home sales index reflected growth in the South and Northeast, where pending sales rose by 3.5 percent and 2.3 percent, respectively.

On the other hand, pending home sales in the West dropped by 4.8 percent and pending sales in the Midwest fell by 2.5 percent.

NAR said existing home sales are expected to be weak in the first quarter but said the pace of sales should pick up in the middle part of the year.

Existing home sales are projected at just over 5.0 million in 2014, NAR said, while the median existing home price is expected to grow 5 to 6 percent.

Wednesday morning, the Commerce Department released a separate report showing an unexpected rebound in new home sales in the month of January.

The report said new home sales jumped 9.6 percent to a seasonally adjusted annual rate of 468,000 in January from the revised December rate of 427,000. Economists had expected sales to drop to an annual rate of 400,000.

With the unexpected increase, new home sales rose to their highest level since hitting an annual rate of 477,000 in July of 2008.