Pending Homes Sales Drop

CHICAGO (TheStreet) -- Pending home sales fell in January, and poor weather conditions will continue to exert pressure on any improvement in the pending homes sales 2010 trend line, according to new data from the National Association of Realtors.

The pending home sales index fell 7.6% in January. The index level is still 12.3% above the January 2009 level.

Analysts had been predicting a 1% rise in the pending home sales data in January.

The pending sales report was the latest weak piece of housing data, after last week's existing homes sales data for January showed a huge decline, also of over 7%.

Lawrence Yun, the chief economist at the National Association of Realtors, said weather is likely to impact housing data. "January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit. Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February."

The national realtors trade group expects the sales rebound to not arrive until spring of this year. "We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June," Yun said.

The expected sales rebound will, to a large extent, continue to depend on improvement in U.S. employment.

The latest news from the public homebuilders hasn't been necessarily rosy either.

Hovnanian Enterprises(HOV) reported its first quarterly profit in years on Wednesday. However, Hovnanian was merely the latest in a long line of homebuilders whose fourth quarter profit was dependent entirely on a one-time tax benefit.

What's more, Orleans Homebuilders(OHB), finally announced this week that it had filed for bankruptcy, after a failed attempt over the past few months to change its credit agreement with lenders or find a buyer.

Regionally, the Western U.S. had the biggest monthly decline, at 13.2%. The Southern U.S. had the smallest dip, of 2.1%. The Northeast and Midwest pending home sales data both fell by close to 9% in January. The U.S. regions remain above January 2009 levels.