Pending home sales fall 7. 6% in january as demand shrinks

The number of buyers who agreed to purchase a home fell sharply in January, a sign that demand for housing is sinking this winter as stormy weather slammed Eastern states. AP Record

snowstorms in January and February had many Americans shoveling sidewalks and driveways instead of combing through listings for open houses. Partly as result, an index that tracks sales

agreements fell 7.6 percent from December to a seasonally adjusted January reading of 90.4, the National Association of Realtors said Thursday. It was the lowest reading since last April and

a disappointment to economists, who had expected it would rise to 97.6. The weakness, however, was not confined to the wintry Northeast. The biggest month-to-month drop was in the West,

where sales fell 13 percent. Sales fell almost 9 percent in the Northeast and Midwest and 2 percent in the South. The weather isn't the only culprit, wrote Jennifer Lee, an economist

with BMO Capital Markets. "The impact of government incentives ... appears to be running out of steam, which is, frankly, a scary thought," she wrote. The index is considered a

barometer for future sales because typically there is a one- to two-month lag between a signed sales contract and a completed deal. A reading of 100 is equal to the average level of sales

activity in 2001, when the index started. The index has declined for two out of the past three months because home shoppers feel less rushed after a deadline for a homebuyer tax credit was

extended from Nov. 30 to April 30. In addition, the Federal Reserve is on track to complete $1.25 trillion in purchases of mortgage-backed securities this month. That has kept interest rates

low. The average rate on a 30-year fixed rate loan fell this week to 4.97 percent from 5.05 percent a weak earlier, Freddie Mac said Thursday. Despite lower rates, millions of homeowners

are still facing foreclosure and government efforts to help them have largely failed. Droves of people who want to sell or refinance are stuck because their homes are worth less than they

paid. Job losses also have led many homeowners to fall behind on their mortgages. On Thursday, the government said new claims for jobless benefits fell last week in a sign that layoffs may

be easing as the economy slowly recovers. he Labor Department said that initial claims for unemployment insurance fell by 29,000 to a seasonally adjusted 469,000. Still, any improvement in

the job market is likely to be slow, as companies are reluctant to add workers. Last week's drop only partly reverses a sharp rise in claims in the previous two weeks. Compared to

January 2009, the index was up 12.3 percent. * Slideshow: Most Active Global Real Estate Markets —_Reuters contributed to this report_