U.S. Markets

U.S. pending home sales drop in October

FILE PHOTO: A townhouse for sale that is currently under contract is seen in Bethesda, Maryland December 30, 2015. REUTERS/Gary Cameron

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes fell in October, the National Association of Realtors said on Thursday.

The NAR’s pending home sales index decreased to a reading of 102.1, down 2.6 percent from the prior month. September’s index was revised to 104.8 from 104.6.

Economists polled by Reuters had forecast pending home sales rising 0.5 percent last month.

Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.Home resales rose 1.4 percent in October from the prior month but were down 5.1 percent from a year earlier, the sharpest 12-month drop since July 2014.

Compared to one year ago, pending sales were down 6.7 percent.