Tuesday, October 13th2.6°C

Signed contracts to buy US homes plunge 8.7 per cent last month, evidence of housing slowdown

WASHINGTON - Fewer Americans signed contracts to buy previously occupied homes in December, suggesting a slowdown in real estate. Pending home sales fell to the lowest point since October 2011.

The National Association of Realtors said its seasonally adjusted pending home sales index dropped 8.7 per cent last month to 92.4. That's the seventh straight monthly decline for the index, which previews upcoming sales. A one- to two-month lag usually exists between a signed contract and a completed sale.

Rising mortgage rates and price increases crimped sales in recent months. Cold weather in December also stalled home purchases.

"People are disinclined to go house-hunting in severe weather conditions," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "We expect something of a rebound in January, but this month's cold weather means it is unlikely all the ground lost will be recovered."

Last month's decline was so steep that it led to a year-over-year drop of 8.8 per cent. The number of signed contracts tumbled in the Northeast, Midwest, South and West in December.

Still, the housing market benefited from historically low mortgage rates for much of 2013.

Sales of previously occupied homes totalled 5.1 million last year, the trade group said last week. That's the highest in seven years, but it's still below the 5.5 million that is consistent with a healthy housing market.

The average interest rate on a 30-year mortgage dropped to 4.32 per cent this week from 4.39 per cent the previous week. Rates surged about 1.25 percentage points from May through September, peaking at 4.6 per cent. That increase occurred after Federal Reserve Chairman Ben Bernanke indicated that the Fed would start to slow its bond-buying program before the end of the year.

The Fed has reduced its monthly bond purchases from $85 billion to $65 billion in its last two policy meetings. The program is intended to push down longer-term interest rates and encourage more borrowing, spending and hiring.

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13964.36-14.30
S&P CDNX552.26+5.20
S&P 5002017.46+2.57
CDN Dollar0.7660-0.003
Natural Gas2.51-0.03

Okanagan Companies
Pacific Safety0.225-0.005
QHR Technologies Inc1.25+0.02
Metalex Ventures0.07+0.02
Russel Metals21.26-0.29
Copper Mountain Mining0.66+0.05
Colorado Resources0.07+0.00
ReliaBrand Inc0.0245+0.0070
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.075-0.005
Decisive Dividend Corp3.25+0.14
Diamcor Mining0.97+0.03


221525910 - 9990 Eastside Road
4 bedrooms 3 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...



Member of BC Press Council