U.S. Pending Home Sales Plunge To All-Time Low In January

(RTTNews) - A report released by the National Association of Realtors on Thursday showed pending home sales in the U.S. plunged by much more than expected in the month of January, extending the sharp pullback seen in December.

NAR said its pending home sales index dove 4.6 percent to an all-time low of 70.6 in January after tumbling 4.1 percent to a revised 74.0 in December.

Economists had expected pending home sales to slump by 1.3 percent compared to the 5.5 percent nosedive originally reported for the previous month.

"It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months," said NAR Chief Economist Lawrence Yun. "However, it's evident that elevated home prices and higher mortgage rates strained affordability."

Pending home sales in the South led the way lower, plummeting by 9.2 percent. Pending home sales in the Midwest and West also slumped by 2.0 percent and 1.2 percent, respectively, while pending home sales in the Northeast rose by 0.3 percent.

"Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices," added Yun.

A separate report released by the Commerce Department on Wednesday showed a substantial pullback by new home sales in the U.S. in the month of January.

The Commerce Department said new home sales plunged by 10.5 percent to an annual rate of 657,000 in January after spiking by 8.1 percent to an upwardly revised rate of 734,000 in December.

Economists had expected new home sales to slump by 2.6 percent to an annual rate of 680,000 from the 698,000 originally reported for the previous month.