WASHINGTON - Fewer Americans than expected signed contracts to purchase previously owned homes in January, indicating the extension of a tax credit is doing little to lure buyers.
The index of purchase agreements, or pending home sales, dropped 7.6 percent after a revised 0.8 percent increase in December, the National Association of Realtors said.
The drop in contract signings adds to evidence the housing market at the center of the worst recession since the 1930s is struggling to rebound after reports last week showed unexpected declines in purchases of new and existing homes. The market may get another blow this month when the Federal Reserve ends planned purchases of mortgage-backed securities.
Economists forecast a 1 percent gain in January pending home sales after a previously reported 1 percent rise a month earlier, according to a Bloomberg News survey.
In November, the number of signed contracts dropped a record 14 percent. The realtors group said February figures may be depressed, as well, following snowstorms in some areas.
The realtors’ report showed declines in January pending sales in all four regions, led by a 13 percent slump in the West. Contract signings fell 8.9 percent in the Midwest, 8.7 percent in the Northeast, and 2.1 percent in the South.
Bloomberg News March 5, 2010