U.S. Pending Home Sales Unexpectedly Fall 1.1% In October

(RTTNews) - Pending home sales in the U.S. unexpectedly decreased in the month of October but remained at a healthy level, the National Association of Realtors said in a report released on Wednesday.

NAR said its pending home sales index tumbled 1.1 percent to 104.1 in October from an upwardly-revised 105.3 in September. Economists had been expecting pending home sales to increase by about 0.6 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 unexpected monthly decrease, NAR noted that the pending home sales index is up by 2.2 percent compared to October of 2013.

Lawrence Yun, NAR chief economist, said, "In addition to low interest rates, buyers entering the market this autumn are being lured by the increase in homes for sale and less competition from investors paying in cash."

"Demand is holding steady but would be more robust if it weren't for lagging wage growth and tight credit conditions that continue to hamper those individuals looking for relief from rising rents," he added.

The monthly drop in pending home sales was partly due to a notable decline in the West, where pending sales fell by 3.2 percent.

Pending home sales in the South and Midwest also dropped by 1.0 percent and 0.6 percent, respectively, while pending sales in the Northeast inched up by 0.5 percent.

Last Thursday, NAR released a separate report showing an unexpected increase in existing home sales in the month of October.

NAR said existing home sales climbed 1.5 percent to a seasonally adjusted annual rate of 5.26 million in October from an upwardly revised 5.18 million in September. Economists had expected existing home sales to edge down to 5.15 million. With the unexpected increase, existing home sales reached their highest level since a matching rate in September of 2013.