Pending Sales of U.S. Existing Homes Fell 2.8% in January

There was spike in mortgages rates in January and early February, so it's no surprise that pending sales for existing homes decreased.

Foreclosures that are driving down prices and unemployment at 9 percent signal the housing market may not make much headway this year. Interest rates that are rising pose another challenge to real estate, which may lag behind the rest of the economy this year.

“This is worrying,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “People may be holding back because they think there are more foreclosures coming. We need a strong pickup in jobs to see people buying again.”

Pending home sales were projected to fall after an originally reported gain of 2 percent in December, according to the median of 39 forecasts in the Bloomberg survey. Estimates ranged from a drop of 6 percent to an increase of 1.5 percent.

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