Pending home sales drop 7.7% in January to a record low

Pending home sales data was released for the month of January this morning. Here is what the figures from the National Association of Realtors looked like:

* Pending home sales plunged 7.7% in January. That was much worse than the 3.5% decline that economists were expecting. December’s reading was also revised to a gain of just 4.8% from the previously reported 6.3% rise.

* The pending home sales index, at 80.4, was off 6.7% from its year-earlier reading of 86.2. That leaves the index at its lowest level on record. The data goes back to 2001.

* Geographically, pendings fell in three out of four regions — by 9.3% in the Midwest, 11.9% in the South, and 12.7% in the Northeast. Pendings climbed 2.5% in the West.

Another day, another dismal housing report. That’s the verdict on the January pending home sales data from the National Association of Realtors. Pendings fell by a much larger than expected margin in January, leaving the index at a record low. The West region was the only bright spot, with a slight increase in sales. But that was more than offset by dramatic declines everywhere else.

As I’ve been saying for a while here, it really does all come back to the job market. And the latest evidence suggests we’re seeing little relief on that front. Jobless claims are rising sharply and layoff announcements are coming fast and furious. The dramatic decline in consumer confidence doesn’t help, either. Nor does the deflationary psychology that haunts home buyer’s dreams these days. Those forces are offsetting any positive benefit from rising affordability.