US pending home sales drops in October

Contracts of previously owned homes in the U.S. unexpectedly fell for the second time in a row in October as a shortage of properties pushed up prices, albeit record-low mortgage rates support the housing market.

Pending Home Sales Index reported by the National Association of Realtors said on Monday plunged 1.1% to 128.9, referencing on contracts signed in October. This report is in contrast to a Reuters forecast of a 1.0% rebound for the month of October.

Year-on-year, pending home sales remains upbeat as it increased by 20.2% in October. The monthly decrease in contracts indicates a moderation in sales of existing home sales after they spiked in October to their highest level since November 2005.

Pending home sales last month in the South increased 0.1%. In the west, figures were retained. Housing contracts fell 5.9% in the Northeast and decreased 0.7% in the Midwest.

Despite homebuilder confidence soaring at its highest rate, builders have groaned about land and materials scarcity.