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Pending home sales fall in January, tied to mortgage rates

US pending home sales have fallen by 4.9% in January, according to the National Association of Realtors (NAR). Yahoo Finance Live breaks down the data and prominent housing pressures still squeezing prospective buyers out of US markets across regions.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

SEANA SMITH: Let's get to some breaking news. Pending home sales falling 4.9% in the most recent month of January. That was down on a month-over-month basis, the biggest monthly drop that we have seen since August. Now we're talking about this because it really is a key indicator, a forward-looking indicator, for what home sales are going to look like here in the coming months when we talk about contract signings.

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Now digging in even further on those month-over-month comparisons here, contract signings rose in the northeast and in the west. They did fall though in the midwest and in the south. Now on an annual basis compared to a year ago, pending home sales, Brad, they're declining in all US regions.

BRAD SMITH: Yeah, we've got a comment here from the National Association of Realtors' Chief Economist Lawrence Yun, saying the job market is solid. The country's total wealth reached a record high due to stock market and home price gains. The combination of economic conditions is favorable for home buying.

However here, and this is the cold water, consumers showing extra sensitivity to changes in mortgage rates in the current cycle here. So pointing that out and pointing out how that's impacting home sales right now. And, of course, there's a little bit of moderation in that regional breakdown here. Midwest decreased. You saw northeast increase just a little bit there. And the south declined by about 7.3%