Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > ETFs > Broad Market

Fewer People Signed Contracts to Buy Homes in January

By Associated Press

X
Your article was successfully shared with the contacts you provided.

WASHINGTON (AP) — Fewer Americans signed contracts to buy homes in January, the latest evidence that the housing market is struggling to rise above depressed levels.

The National Association of Realtors says its index of sales agreements for previously occupied homes fell 2.8% last month to a reading of 88.9, the second straight monthly decline.

The reading was higher than the 75.9 reading from June, the low point since the housing bust. But it's below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit.

Sales of previously owned homesfell last year to the lowest level in 13 years. Economists say it will be years before the housing market fully recovers. High unemployment, strict lending standards, and a record number of foreclosures are deterring potential buyers, who fear homeprices haven't reached the bottom.

Contract signings of previously owned homesare usually a good indicator of where the housing market is heading. That's because there's usually a one- to two-month lag between a salescontract and a completed deal.

Steven Wood, chief economist for Insight Economics, said the tax credits have pulled home saleson a "rollercoaster ride over the past two years" and that saleshave not yet found a steady level.

The Realtors group had reported a modest 2% increase in December, which would have marked the fifth such uptick in the previous six months. But the trade association, which began tracking contract signings of homesin 2001, revised its figures to show that signings fell in December from November by nearly 3.2%.

Jennifer Lee, senior economist for BMO Capital Markets, said the dismal contract numbers in January is "clearly bad news" for the nation's housing industry.

"And we can't blame weather as three of the four regions saw a decline," she said.

Prices and salesof previously occupied homeshave painted a grim picture of that portion of the housing market, which historically accounts for roughly 85% of home sales.

Housing prices in all but one of the 20 cities tracked by the Standard & Poor's/Case Shiller index fell in December from November. Eleven of the markets — stretching from Seattle to Miami — hit their lowest point since the housing bubble burst in 2006 and 2007.

Salesof previously occupied homesrose slightly last month. But the seasonally adjusted annual pace of 5.36 million is still far below the 6 million homesa year needed to maintain a healthy market.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.