The NAR’s pending home sales index dropped 2.5% to 106 last month from an upwardly revised December reading of 108.7%. The drop was a surprise; economists had projected that home sales would increase by about 0.5% in January, according to an RTTNews report.
While sales dropped month-over-month, they were up 1.4% over January of 2015, according to the NAR report. That marks the 17th straight month of year-over-year increases – although January’s gain was the second smallest in that time, RTTNews noted.
“While January's blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers,” NAR chief economist Lawrence Yun said.
Home sales in the Midwest saw the biggest plunge last month, dropping by 4.9%. Pending sales in the West were down 4.5%, and pending sales in the Northeast fell by 3.2%. The South saw a small gain, with pending sales creeping up by 0.3%.
The NAR predicts around 5.38 million existing home sales this year. That would represent an increase of 2.5% from last year. Meanwhile, the association projects that the national median sale price for existing homes will rise between 4% and 5%.
Pending home sales took an unexpected tumble in January, according to a new report from the National Association of Realtors.