Investing.com - Contracts to buy previously owned homes unexpectedly fell to their lowest level since 2014, but the National Association of Realtors (NAR) suggested that the U.S. housing market still held a bright outlook for future growth.
NAR said its pending home sales index, which measures signed contracts for homes where transactions have not yet closed, decreased 0.7% to a reading of 101.4 after declining by 2.6% in the previous month.
Economists had forecast pending home sales rising by 0.7% last month.
Despite the decline, NAR chief economist Larry Yun noted that, while pending contracts have reached their lowest mark since 2014, he suggested there was no reason to be overly concerned, predicting solid growth potential for the long-term.
“The latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates (...) Home sales in 2018 look to close out the year with 5.3 million home sales, which would be similar to that experienced in the year 2000. But given the 17 million more jobs now compared to the turn of the century, the home sales are clearly underperforming today. That also means there is steady longer-term growth potential,” he explained.