By Xavier Fontdegloria

The number of houses going under contract in the U.S. fell in January as inventory constraints continue to hold back prospective buyers, data from the National Association of Realtors showed Thursday. Here are the report's main takeaways:

--The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, fell 2.8% to 122.8 in January.

--Economists polled by The Wall Street Journal expected the indicator to decrease by 0.5%. In December, the index fell by 0.3%.

--Pending home sales were up 13% in January compared with the same month a year earlier.

--"Pending home sales fell in January because there are simply not enough homes to match the demand on the market," said Lawrence Yun, the National Association of Realtors' chief economist. However, the recent increase in housing permits is a good sign that the supply and demand imbalance in the residential real state market could be easing as soon as mid-2021, he said.

--Month-over-month contract transactions in January declined in three of the four major U.S. regions. Activity fell the most in the West and the Northeast, by 7.8% and 7.4% respectively, and to a much lesser degree in the Midwest, where they decreased 0.9%. Transactions inched up in the South, albeit by a marginal 0.1%.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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(END) Dow Jones Newswires

February 25, 2021 10:14 ET (15:14 GMT)

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