U.S. pending home sales fall sharply in October, likely to continue to fall in months ahead

Pending home sales in the U.S. dropped in October, implying more weakness in housing activity. Sales dropped sharply by 2.6 percent sequentially in the month, continuing a string of weak reports in sales activity that has brought the annual pace of sales down to -4.6 percent.

Sales dropped throughout three of the large four regions, with the West driving much of the underperformance, but the Midwest and South also recorded considerable declines. Pending home sales measure housing contract activity and are based on signed real estate contracts for existing single-family homes, condos, and co-ops. Around 80 percent of pending home sales would become existing home sales in two months.

“As a result, the October report suggests continued declines in home sales in the coming months”, said Barclays in a research report.

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