U.S. pending home sales increase 4.6 percent in January

FILE PHOTO: Development and construction continues on a large scale housing project of over 600 homes in Oceanside, California, U.S., June 25, 2018. REUTERS/Mike Blake/File Photo

WASHINGTON (Reuters) - Contracts to buy previously owned homes rose in January, the National Association of Realtors said on Wednesday.

The NAR’s pending home sales index increased to a reading of 103.2, up 4.6 percent from the prior month. December’s index was revised to 98.7 from 99.0.

Economists polled by Reuters had forecast pending home sales rising 0.4 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.U.S. existing home sales fell in January to their lowest level in more than three years and house prices rose only modestly, suggesting a further loss of momentum in the housing market.

Compared to one year ago, pending sales were down 2.3 percent.

Reporting by Howard Schneider; Editing by Andrea Ricci