Recent drop in US pending home sales likely to be temporary

US pending home sales declined 0.9% mom in November, way lower than the market consensus anticipations of firm monthly rise. The upward revisions to last month's data boosted the yoy rise to 5.1% over consensus exxpectations of 4% yoy increase.

The sales increased slightly in Midwest and South while experiencing large amount of drops in Northeast and West. Despite some softness since last summer, the pending home sales have held relatively up to existing ones.

"We view the recent drop in existing home sales as temporary and expect these sales to rise back to a level more consistent with pending sales as lenders adjust to new mortgage disclosure rules", says Barclays in a research note. 

The ongoing softness in US pending sales suggests some risk to the housing market outlook in early 2016.