US pending home sales undershoot forecasts in February

A lead indicator of activity in the US housing sector fell at the start of the year, but remained slightly above year ago levels.

The National Association of Realtors´ pending home sales index declined by 2.5% month-on-month in January to a reading of 106.0.

That was worse than the 0.6% drop economists had penciled in.

In comparison to a year ago the PHI stood 1.4% higher, its second-smallest annual gain over the last 17 months.

Lawrence Yun, NAR chief economist, attributed the decline to myriad factors including cold weather and the lack of home supply, together with higher prices.

“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.”

“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors,” Yun added.

“Without a much-needed boost in new and existing-homes for sale in their price range, their path to homeownership will remain an uphill climb.”