Existing Home Sales Slowing

Existing home sales appear to be slowing, the latest evidence coming from the pending home sales index which fell an unexpected 4.7 percent in January to a 104.6 level that is the lowest in nearly 3-1/2 years. Today's result points to a third straight decline for final sales of existing homes which fell very sharply in both January and December.

Lack of supply is a key factor holding down sales along with rising mortgage rates, at an average of 4.64 percent for 30-year mortgages as reported earlier this morning by the Mortgage Bankers Association. Regional sales data show wide declines especially for the Northeast which had been rebounding in prior months.

The housing sector accelerated at the end of last year but, despite strong leadership from the new home market, appears to have slowed so far this year.

Consensus Outlook:
Pending home sales have been rising at a steady and moderate rate while final sales of existing home sales have been choppy month-to-month, finishing 2017 on the uptrend but falling sharply in January. The Econoday consensus for the pending sales index, which is for January, is a moderate gain of 0.3 percent.