Investing.com - Pending home sales in the U.S. unexpectedly fell in January, dampening optimism over the health of the housing sector, industry data showed on Monday.
In a report, the National Association of Realtors (NAR) said its pending home sales index decreased by a seasonally adjusted 2.8% last month, disappointing expectations for an increase of 0.8%.
The pending home sales index decreased to 106.4 in January from the prior 109.5 (initially 109.0).
December’s reading was revised to a 0.8% gain, compared to the initial reading of a 1.6% increase.
Year-on-year, pending home sales increased at an annualized rate of 0.4% in January.
“Insufficient supply levels led to a lull in contract activity in the Midwest and West, which dragged down pending home sales in January to their lowest level in a year,” NAR explained in the report.
“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” NAR chief economist Larry Yun said.
According to Yun, interest in buying a home is the highest it has been since the Great Recession.
“Households are feeling more confident about their financial situation, job growth is strong in most of the country and the stock market has seen record gains in recent months,” he said.
“Sales got off to a fantastic start in January, but last month's retreat in contract signings indicates that activity will likely be choppy in coming months as buyers compete for the meager number of listings in their price range,” Yun concluded.
Immediately following the report, EUR/USD was trading at 1.0594 from around 1.0603 ahead of the release of the data, GBP/USD was at 1.2429 compared to 1.2419 previously, while USD/JPY was at 112.35 from 112.17 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.00, compared to 100.91 ahead of the report.
Meanwhile, U.S. stock markets traded slightly lower after the open. The Dow 30 dropped 0.01%, the S&P 500 lost 0.03%, while the Nasdaq Composite slipped 0.04%.
Elsewhere, in the commodities market, gold futures traded at $1,258.00 a troy ounce, compared to $1,259.45 ahead of the data, while crude oil traded at $54.24 a barrel from $54.39 earlier.