With the Northeast leading the way, the inventory of single-family properties that were under contract last month fell to the lowest level in over three years.
A forward-looking indicator of home sales based on contract signings, the Pending Home Sales Index, finished January at a seasonally adjusted 104.6.
Last month turned out to be the lowest level for pending home sales since October 2014, when the index was calculated to be 104.1.
The National Association of Realtors, which reported the data Wednesday, said the index was a downwardly revised 109.8 in December 2017. In January 2017, the index was an upwardly revised 108.7.
“Woefully low supply levels and the sudden increase in mortgage rates” were behind the dismal reading, according to NAR Chief Economist Lawrence Yun. “The lower end of the market continues to feel the brunt of these supply and affordability impediments.”
Yun noted that despite the drop in contract signings,
Realtors indicated that traffic was up in January compared to a year ago in most areas. The exception was the Northeast, where a cold spell impaired activity.
The economist said
that doggedly low available listings continue to plague the real estate market. But he suggested that weakening multifamily demand could push investors to let loose of single-family rentals — which would be a boon for home buyers..
At 87.0, the seasonally adjusted index in the Northeast as of January 2018 declined from the prior month by 9 percent — the most of any region.
The index in the Midwest subsided 7 percent to 98.2, the South’s index fell 4 percent to 121.9, and the West was off a percent to 97.9.
