Pending Home Sales Drop More than Expected


Contracts to buy previously owned U.S. homes fell more than expected in December as tighter inventory and an increase in house prices discouraged buyers.

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The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed last month, decreased 3.7 percent to 100.7. The NAR also slightly revised down its index in November to 104.6.

These contracts usually become sales after a month or two. Economists polled by Reuters had forecast total pending home sales rising 0.5 percent in December from the previously reported level.

Contracts declined in the four main regions of the country.

U.S. pending home sales sputtered throughout 2014, but a strengthening economy, decline in mortgage rates and an easing in lending standards have renewed optimism for the coming months.

Compared to December of 2013, contracts were up 6.1 percent. (Reporting by Lindsay Dunsmuir; Editing by Paul Simao)