Investing.com - Pending home sales in the U.S. dropped more than expected in August, dampening optimism over the health of the housing sector, industry data showed on Wednesday.
In a report, the National Association of Realtors (NAR) said its pending home sales index decreased by a seasonally adjusted 2.6% last month, compared to expectations for a decline of 0.5%. That was the fifth decline in the last six months.
The reading on the index itself decreased to 106.3 in August from the prior 109.1. That was its lowest reading since January 2016.
Year-on-year, pending home sales fell at an annualized rate of 2.6% in August.
“This summer’s terribly low supply levels have officially drained all of the housing market’s momentum over the past year," NAR chief economist Larry Yun said.
This expert blamed the decline on limited listings and home prices rising far above incomes.
“Demand continues to overwhelm supply in most of the country, and as a result, many would-be buyers from earlier in the year are still in the market for a home, while others have perhaps decided to temporarily postpone their search,” he explained.
Yun added that Hurricane Harvey’s damage to Houston impacted contract signings in the South, while Hurricane Irma was likely to slow sales even further in the region.
Following the report, EUR/USD was trading at 1.1729 from around 1.1724 ahead of the release of the data, GBP/USD was at 1.3393 compared to 1.3392 previously, while USD/JPY was at 113.00 from 113.08 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 93.31, compared to 93.35 ahead of the report.
Meanwhile, U.S. stock markets traded higher after the open. The Dow 30 gained 44 points, or 0.20%, the S&P 500 rose 7 points, or 0.28%, while the Nasdaq Composite gained 41 points, or 0.65%.
Elsewhere, in the commodities market, gold futures traded at $1,287.90 a troy ounce, compared to $1,287.41 ahead of the data, while crude oil traded at $52.06 a barrel from $52.08 earlier.