In December, pending home sales nationally fell 3.7 percent month-over-month. Still, NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, remained about 6 percent above year-over-year levels for the fourth consecutive month.
Lawrence Yun, NAR’s chief economist, says that inventory problems mixed with slightly higher home prices attributed to December’s decline in contract signings.
Total inventory dropped in December for the first time in 16 months, which left homebuyers with fewer choices of homes for-sale.
“With interest rates at lows not seen since early 2013, the strength in existing-sales in upcoming months will largely depend on the willingness of current home owners to realize their equity gains from the past couple years and trade up,” Yun says. “More jobs, increasing consumer confidence, less expensive mortgage insurance, and new low down payment programs coming into the marketplace will likely lead to more demand from first-time buyers.”
Across the country, here’s how pending-home sales fared in December:
- Northeast: posted the largest decline of any other region, dropping 7.5 percent in December month-over-month. Pending home sales, however, remain 6.3 percent above year ago levels.
- Midwest: decreased 2.8 percent in December, but remains 1.9 percent above December 2013.
- South: decreased 2.6 percent in December, but pending-home sales are 8.6 percent above the prior December’s levels.
- West: declined 4.6 percent in December, but pending-home sales are 6.3 percent above a year ago.