US pending home sales took a plunge in January, falling to the lowest level in six months as potential homebuyers competed for a diminishing supply of property.
According to the latest data published by the National Association of Realtors (NAR), the pending home sales index fell by 2.8% in January, to a reading of 122.8— the lowest since July 2020. The sudden decline was largely unexpected, especially since December data was revised upwards to reflect a 0.5% increase, and a Bloomberg survey of economists called for a flatline in the first month of 2021.
The latest index decline suggests that the booming US housing market may be at the beginning of a declining trend, especially amid surging home prices, low inventory levels, and increasing mortgage rates. Despite this however, contract signings still remain 8.2% higher compared to the same period a year ago. “There are simply not enough homes to match the demand on the market,” said NAR chief economist Lawrence Yun in a recent statement.
Information for this briefing was found via the NAR and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.