U.S. pending home sales unexpectedly decline in April

Pending home sales in the U.S. unexpectedly declined in April, dampening optimism over the health of the housing sector, industry data showed on Wednesday.

In a report, the National Association of Realtors (NAR) said its pending home sales indexdecreased by a seasonally adjusted 1.3% last month, compared to expectations for a gain of 0.5%.

The reading on the index itself decreased to 109.8 in April from the prior 111.3 (revised from an initial reading of 111.4).

Year-on-year, pending home sales fell at an annualized rate of 3.3% in April.

NAR chief economist Larry Yun said contract activity is fading this spring because significantly weak supply levels are spurring deteriorating affordability conditions.

” Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market,” he said.

“Realtors are indicating that foot traffic is higher than a year ago, but it’s obviously not translating to more sales,” he added.

“Prospective buyers are feeling the double whammy this spring of inventory that’s down 9.0% from a year ago and price appreciation that’s much faster than any rise they’ve likely seen in their income,” Yun explained.

Unfortunately, Yun believes there is little evidence these astoundingly low supply levels are going away soon.

“Homebuilding activity has not picked up enough this year and too few homeowners are listing their home for sale,” he said.

Following the report, EUR/USD was trading at 1.1236 from around 1.1237 ahead of the release of the data, GBP/USD was at 1.2860 compared to 1.2875 previously, while USD/JPY was at 110.55 from 110.71 earlier.

Meanwhile, U.S. stock markets traded lower after the open. The Dow 30 lost 0.38%, the S&P 500 fell 0.31%, while the Nasdaq Composite traded down 0.55%.

Elsewhere, in the commodities market, gold futures traded at $1,267.20 a troy ounce, compared to $1,265.08 ahead of the data, while crude oil traded at $48.10 a barrel from $48.28 earlier.

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