Washington (AP) - The number of homebuyers who agreed to purchase an existing home sank to a new low in January as economic woes turned them away from the staggering housing market, the National Association of Realtors said Tuesday.
The group's seasonally adjusted index of pending sales contracts fell 7.7 percent to 80.4 in January from a downwardly revised December reading of 87.1.
January's reading was far worse than the 85.1 economists expected, according to Thomson Reuters, and came in below the previous record low of 82.5 in November.
"It really does all come back to the job market," said Mike Weiss, a real estate analyst with Weiss Research, in a research note. "The latest evidence suggests we're seeing little relief on that front. Jobless claims are rising sharply and layoff announcements are coming fast and furious."
The index, which started in 2001, tracks signed contracts to buy previously owned homes. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.
The stumbling housing market took a steep dive after last fall's dramatic stock market declines. Though sales bounced in December, they fell more than 5 percent in January, diminishing hopes that the worst of the housing recession was over. And Tuesday's report appeared to confirm that.
Pending sales were down in every region but the West, where soaring foreclosures have made prices especially attractive for buyers. The index there was up more than 2 percent from December.
Pending sales in the Northeast, however, were down about 13 percent, while they fell 12 percent in the South and 9 percent in the Midwest.
Many in the real estate industry are counting on an $8,000 tax credit for first-time homebuyers as their best hope for boosting flagging sales. That incentive was included in the economic stimulus package signed by president Barack Obama last month.
"Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales," Lawrence Yun, the Realtors chief economist, said in a statement.
The number of homebuyers who agreed to purchase an existing home sank to a new low in January as economic woes turned them away from the staggering housing market, the National Association of Realtors said Tuesday.