Completing the triumvirate of turmoil in the US housing market, pending home sales joined new- and existing-home sales prints with a big decline in January.

Pending home sales tumbled 4.6% MoM in January (after dropping 4.2% MoM in December), dramatically worse than the 0.9% MoM decline expected and dragging YoY sales down 5.2%...

Source: Bloomberg

This drop pushed pending home sales index to its all-time lows...

Source: Bloomberg

Contract signings tumbled 9.2% in the South - the biggest home-selling region in the country - parts of which experienced historic snowfall. That marked the biggest drop since the start of the Covid-19 pandemic.

Worse still, home prices continue to rise and squeeze would-be buyers. 

National home prices rose 3.9% in December from a year earlier, up from the 3.7% annual gain seen a month earlier, according to data from S&P CoreLogic Case-Shiller.

The median sale price of a previously owned home in the US was $396,900 last month, according to NAR data, up 49% from five years earlier.

Of course, there is always an excuse:

“It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months,” NAR Chief Economist Lawrence Yun said in a statement. 

“However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”

what!? No!? Cold weather in winter!!!! No one told the analysts who forecast just a small decline?

Finally, bear in mind that pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.