A gauge of near-term home sales in the US showed a downward trend continuing, despite expectations of a modest uptick.
Pending home sales in November fell 0.7% over the month before, and 7.7% compared with the same period last year, The National Association of Realtors said Friday. The month marked the eleventh-straight month of YoY declines.
A Reuters poll showed economists expecting the measure to rise 0.7%.
The sales index predicts transactions that will be completed within the next one to two months.
NAR chief economist Lawrence Yun said that the government shutdown, currently in its seventh day, will weigh on the housing market if it persists.
“Unlike past government shutdowns, with this present closure, flood insurance is not available. That means that roughly 40,000 homes per month may go unsold because purchasing a home requires flood insurance in those affected areas,” Yun said. “The longer the shutdown means fewer homes sold and slower economic growth.”
That being said, he stressed that there is no reason to be overly concerned by the data as it does not reflect some favorable trends.
“The latest decline in contract signings implies more short-term pullback in the housing sector and does not yet capture the impact of recent favorable conditions of mortgage rates,” he noted.