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U.S. Pending Home Sales Unexpectedly Slump 1.1% In October

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Pending home sales in the U.S. unexpectedly decreased in the month of October, according to a report released by the National Association of Realtors on Monday.

NAR said its pending home sales index slid by 1.1 percent to 128.9 in October after tumbling by 2.0 percent to a revised 130.3 in September.

The continued decline came as a surprise to economists, who had expected pending home sales to jump by 1.0 percent compared to the 2.2 percent slump originally reported for the previous month.

Despite falling for two straight months, pending home sales in October were still up by 20.2 percent compared to the same month a year ago.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

"Pending home transactions saw a small drop off from the prior month but still easily outperformed last year's numbers for October," said NAR's chief economist Lawrence Yun. "The housing market is still hot, but we may be starting to see rising home prices hurting affordability."

The unexpected drop in pending home sales came as pending sales in the Northeast tumbled by 5.9 percent and pending sales in the Midwest fell by 0.7 percent.

Meanwhile, pending home sales in the West were unchanged after pending sales in the South inched up by 0.1 percent.

The Commerce Department released a report last Wednesday showing new home sales in the U.S. unexpectedly edged lower in the month of October.

The report said new home sales dipped by 0.3 percent to an annual rate of 999,000 in October after inching up by 0.1 percent to a revised rate of 1.002 million in September.

Economists had expected new home sales to jump by 1.1 percent to a rate of 970,000 from the 959,000 originally reported for the previous month.

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