Wall Street’s early gains were tempered after pending home sales fell in October. According to the National Association of Realtors, pending home sales fell 0.6% after September’s sales were revised higher. Pending sales were down 1.6% from a year ago. It’s the slowest sales pace in nearly a year.
It looks like the government shutdown back in October was partially to blame. “The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17 percent of Realtors reported delays in October, mostly from waiting for IRS income verification for mortgage approval,” said Lawrence Yun, chief economist for the NAR in a press release.
The South and West regions were responsible for the decline. Pending sales in the South dropped 0.8%, while the West plunged 4.1% lower. Sales in the Northeast and Midwest gained 2.8% and 1.2% respectively.
Limited inventory is likely to continue to affect home sales. The inventory picture has led to a rapid increase in home prices which have left some buyers on the sidelines.
Stocks reacted to the news to the downside. Wall Street was flying high after oil futures took a massive hit following yesterday’s historic U.S./Iran deal. The deal calls for Iran to stop near weapons grade uranium production in return for the easing of some sanctions. The agreement will last for six months while diplomats work out a more long term agreement.
The S&P 500 fell 4 points following pending home sales. The Nasdaq dropped more than 20 points from its highs of over 4,000. Both indexes are recovering some now, though.
Other news to watch this week include consumer confidence on Tuesday and weekly jobless claims on Wednesday. The market will be closed on Thursday for Thanksgiving and will have a short day on Friday.
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