US Pending Home Sales Fell More Than Forecast
THE TAKEAWAY: [US Pending Home Sales fell more than expected in February] > [Inventory shortage held back a further recovery in housing, while demand remains high] > [USD/CAD Bullish]
The number of signed contracts to purchase previously owned homes in the U.S. dropped in February as limited inventories drags on the housing sale despite of a high demand. The National Association of Realtors reported today that its pending home sales index, a forward-looking indicator based on contract signings, fell by 0.4 percent to 104.8, following a 3.8 percent increase in January that was downwardly revised from 4.5 percent initially reported. The median forecast of 37 economists surveyed by Bloomberg News had projected a 0.3 percent decline in the Index. On a yearly basis, pending home sales rose 5.0 percent in February, falling short of the expectation for an 8.7 percent increase.
Relatively low inventories held back the recovery of the US housing sector. Demand for existing homes, on the other hand, is pick up which pushes up home values. As new home constructions continue to increase, the shortage of available properties is likely to be relieved in the following months.
Chart created using Marketscope 2.0 – Prepared by Renee Mu
The U.S. dollar slightly strengthen against the Canadian currency following the data release, with USDCAD rally to C$1.0171. At the time of this report written, the USDCAD was trading lower to C$1.0166.
--- Written by Renee Mu DailyFX Research
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