The National Association of Realtors reported that pending US existing home sales fell unexpectedly in January. According to NAR, the index of purchase agreements fell 7.6 percent in January, after a 0.8 percent increase in December.
Business Week followed up with economists speculating that there are a few reasons for the surprising drop, even though the homebuyer tax credit was extended in November. These reasons point to low buyer confidence due to the lack of jobs and mounting foreclosures, with foreclosure filings rising 15 percent in January. One reason that you may not expect is the extended winter weather experienced across the country in January. Economists report that overall shopping was down in January, due to consumers choosing to stay indoors over braving the winter weather.
Most economists agree that there will be a recovery but it will be a slow one, comparing this to the late 1980s and early 1990s. NAR also reports that January is 11.5 percent higher than January of 2009, supporting the claim that recovery is coming. Similarly, Homes.com also sees strong trends towards a housing recovery based on record breaking traffic on the site.
For more information you can read the original Business Week article or you can view the report from National Association of Realtors .