Pending Home Sales Fall 2.5% in January

Washington, DC, February 29, 2016—Following the highest average year for the index in nearly a decade, pending home sales declined to begin 2016 but remained slightly higher than a year ago, according to the National Association of Realtors.

Only the South saw an uptick in contract activity in January.

The Pending Home Sales Index declined 2.5% to 106.0 in January from an upwardly revised 108.7 in December but is still 1.4% above January 2015 (104.5). Although the index has increased year over year for 17 consecutive months, last month’s annual gain was the second smallest (September 2014 at 1.2%) during the timeframe.

Lawrence Yun, NAR chief economist, says a myriad of reasons likely contributed to January contract signings subsiding in most of the country. “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,” he said. “Additionally, some buyers could be waiting for a hike in listings come springtime.”

Existing home sales increased last month and were considerably higher than the start of 2015, but price growth quickened to 8.2%, the largest annual gain since April 2015 (8.5%).