After plunging in December (biggest drop since COVID), US Pending Home Sales disappointed once again with a modest 0.8% MoM decline in January (+2.0% MoM exp). This left sales down 1.23% YoY...

Source: Bloomberg

This left the Pending Home Sales Index at a record low...

Source: Bloomberg

Mortgage rates continued to slide... so WTF is holding buyers back?

Source: Bloomberg

“Improving affordability conditions have yet to induce more buying activity,” NAR Chief Economist Lawrence Yun said in a statement.

Yun cautioned that the mix of lower mortgage rates and a still-tight supply of houses could cause home prices to start rising quickly again, assuming the lower borrowing costs encourage more buyers.

“This will put increasing pressure on affordability, which is why it is critical to increase supply by building more homes,” Yun said.

Weather could have impacted sales as sales were weakest in the NorthEast and South - where the winter storm was most impactful.

Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.