US reports decline in pending home sales in December

U.S. pending home sales dropped in December to the lowest level in more than two years, a fresh sign that the housing recovery lost momentum, a leading U.S. industry group reported Thursday. The National Association of Realtors (NAR) said its index of pending home sales, which measures the number of contracts that have been signed but not yet closed for purchasing previously owned homes, fell 8.7 percent to 92.4 in December, the lowest level since October 2011. Lawrence Yun, NAR chief economist, said several factors were working against buyers. "Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers." "Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice," Yun noted. The NAR index is a forward-looking indicator of future existing home sales, since there is usually one or two months' lag between signing a contract and closing a deal. A reading of 100 indicates an average level of sales activity. Total existing-home sales this year are expected to reach 5.1 million, essentially the same as 2013, and national median existing-home price is projected to rise about 5.4 percent in 2014, the NAR predicted.