U.S. pending home sales slip in October: NAR

FILE PHOTO: A "For Sale" sign is seen outside a home in Cardiff, California February 22, 2016. REUTERS/Mike Blake/File Photo

(Reuters) - Contracts to buy previously owned U.S. homes fell unexpectedly in October, with new contract signings down in three of the four U.S. regions.

The National Association of Realtors said on Wednesday its pending home sales index, based on contracts signed last month, decreased 1.7% to a reading of 106.7.

Economists polled by Reuters had forecast pending home sales rising 0.8% 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.

Compared with one year ago, pending sales were up 4.4%.

In October, contracts increased in the Northeast but fell in the South, West and Midwest.

“While contract signings have decreased, the overall economic landscape remains favorable,” NAR chief economist Lawrence Yun said in a statement. “Mortgage rates continue to be low at below 4% – which will attract buyers – employment levels are strong and many recession claims have dissipated.”

Reporting by Dan Burns; Editing by Chizu Nomiyama