The National Association of Realtors released a report on Friday showing a continued slump in pending home sales in the U.S. in the month of January.
NAR said its pending home sales plunged by 5.7 percent to 109.5 in January after tumbling by 2.3 percent to a revised 116.1 in December.
The continued decrease came as a surprise to economists, who had expected pending home sales to jump by 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
“With inventory at an all-time low, buyers are still having a difficult time finding a home,” said Lawrence Yun, NAR’s chief economist. “Given the situation in the market – mortgages, home costs and inventory – it would not be surprising to see a retreat in housing demand.”
The unexpected slump in pending home sales was partly due to a steep drop in pending sales in the Northeast, which plummeted by 12.1 percent.
Pending home sales in the South and West also plunged by 6.3 percent and 5.9 percent, respectively, while pending sales in the West jumped by 1.5 percent.
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