Pending home sales in January plunged despite falling mortgage rates. The GDP report, due tomorrow will be delayed.
The pending home sales index is a leading indicator of existing home sales (resales). The National Association of Realtors (NASR) developed the index.
Pending home sales are those in which a contract was signed, but not yet closed. It usually takes four to six weeks to close a contracted sale
Pending home sales fell a steep 2.2 percent in the month which points to unwelcome weakness for final sales of existing homes especially in January and also February. Final sales in December, reported last week, dropped a very sharp 6.4 percent to a 4.990 million annualized rate that was the lowest in more than three years. The pending sales index can be volatile but the direction of today's indication is unmistakable.
In December, existing home sales fell 6.4% to a seasonally adjusted rate of 4.99 million in December. Economists expected a 1.3% decline.