Contracts to buy previously owned homes unexpectedly fell in April, the National Association of Realtors said on Thursday.
The NAR's pending home sales index dropped to a reading of 104.3, down 1.5% from the prior month. Economists polled by Reuters had forecast pending home sales would rise 0.9% last month. The measure was up 0.4% from a year earlier on an unadjusted basis, the first positive reading in a year, suggesting some stabilization.
March's index was revised slightly higher to 105.9, the highest reading since July 2018.
Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.
Compared to one year ago, pending home sales were down 2.0%, marking the 16th straight month of annual decreases.
The monthly decline adds to signs of a soft housing market amid an economy that may be losing some steam. Previous data showed sales of both new and existing homes fell in April while single-family housing permits dropped to the lowest level in almost two years. At the same time, low mortgage rates, more affordable properties and rising wages should support demand, and contract activity remains higher than in late 2018.
“Though the latest monthly figure shows a mild decline in contract signings, mortgage applications and consumer confidence have been steadily rising,” NAR Chief Economist Lawrence Yun said in a statement. “It’s inevitable for sales to turn higher in a few months.”
Contracts decreased from the prior month in three of four regions, led by a 2.5% drop in the South. The Midwest was the only area to record a gain, at 1.3%.
Forecasts for monthly pending home sales in a Bloomberg survey of economists ranged from a 1% drop to a 1.6% gain.
Material from Bloomberg and Reuters has been used in this report.
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