The number of agreements to purchase existing homes in the United States grew slower than expected in September, indicating demand may stagnate towards the end of the year.
The pending home sales gauge rose 0.3 percent after declining 1 percent a month earlier, according to the National Association of Realtors. Economists surveyed by Bloomberg News had expected the index to increase 1 percent.
Pending sales increased in two out of four U.S. regions from a month earlier. Sales rose 1.4 percent in the South and 1.2 percent in the Northeast. They fell 1.2 percent in the Midwest, while sales in the West were down 0.8 percent.
NAR reported that contracts rose 3 percent in the year through September, compared with an annual decline of 4.1 percent in August. Last month’s figures were also the first year-on-year growth since September 2013.
Economists view pending sales as a key measure as they keenly monitor purchase agreements. Normally, existing home sales are recorded once the deal is closed, usually after a month or two. The home resales grew in September to an annual rate of 5.17 million, the most in 12 months, according to NAR report released last week. Demand stood at 5.38 million units in July 2013, nearly a four-year high.
Meanwhile, U.S. services sector grew at the slowest pace in six months in October as manufacturing activity in Texas fell, indicating the economic growth is uneven in the early stages of the fourth quarter.
“Home sales are probably not going to do much but business activity in general is still pointing to a solid underpinning for the U.S. economy,” Jacob Oubina, a New York-based senior U.S. economist at RBC Capital Markets, told Reuters.
Markit Economics reported that its flash or preliminary services sector purchasing managers index fell to 57.3 in October, the weakest since April, compared with 58.9 last month. A measure above 50 is an indicator of expansion in services activity. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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