US Home Sales have lost considerable momentum - Wells Fargo

According to analysts from Wells Fargo, US pending sales, which measure purchase contracts, are being held back by unusually low for-sale inventory. 

Key Quotes: 

“Pending home sales fell much more than expected in August, with the headline index falling 2.6 percent, or nearly five times the consensus estimate. While pending sales were undoubtedly impacted by Hurricane Harvey, sales fell in all four regions.”

“The Northeast posted the largest drop, with pending sales falling 4.4 percent in August. Pending sales fell 3.5 percent in the South. Both regions are down 4.3 percent year-to-year. 

“The slide in pending sales suggests existing home sales will fall during the next few months. The hurricanes will likely lead to further deterioration. The storms damaged homes, disrupted home buying and will delay closings for the next few months.”

“Mortgage applications for home purchases have not fallen anywhere near as much as purchase contracts. Aside from low inventories, the fundamentals for home sales remain positive.”