Investing.com - A forward looking indicator of U.S. home sales fell in January, according to data released on Wednesday by the National Association of Realtors (NAR).
Pending home sales, or signed contracts for homes where transactions have not yet closed, fell 4.7%, down from a 0.5% gain in the previous month.
Economists had forecast pending home sales rising 0.4% last month.
After seeing a modest three-month rise in activity, pending home sales cooled considerably in January to their lowest level in over three years, according to report which indicated that all major regions experienced monthly and annual declines in contract signings last month
After last month’s retreat, the index is now is now at 104.6, 3.8% below a year ago and at lowest level since October 2014 (104.1).
“The economy is in great shape, most local job markets are very strong and incomes are slowly rising, but there’s little doubt last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,” NAR chief economist Larry Yun noted in the report.
"With the cost of buying a home getting more expensive and not enough inventory, some prospective buyers are either waiting until listings increase come spring or now having to delay their search entirely to save up for a larger down payment,” he added.