Signed contracts for home purchases fell for the seventh consecutive month in December according to the National Association of Realtors® (NAR) Pending Home Sales Index (PHSI).
The future contract signings indicator fell by 8.7 percent to 92.4 in December from a revised 101.2 in November and was 8.8 percent lower than in December of last year when the Index was at 101.3. It was the seventh consecutive month that the Index has declined.
In May of last year, the Index had reached its highest level in over six years but has declined every month since.
Lawrence Yun, chief economist of NAR, stated, “Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers.”
All four of the regions in the Index posted declines in both their monthly level of contract signing activity and year-over-year activity.
The Northeast posted the largest monthly decrease in activity, falling 10.3 percent from the previous month followed by the West with a decline of 9.8 percent. The South reported a decline of 8.8 percent while the Midwest posted a decline of 6.8 percent.
The West reported the largest decrease in contract signings compared to December of last year with a 16.0 percent decline followed by the Midwest and the South which were 6.9 percent lower than last year while the Northeast posted a 5.5 percent decline from the previous year.
The PHSI is a forward looking indicator which generally indicates closings one to two months in the future.
“Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors,” Yun added.
Tags: pending home sales, existing home sales, contract signings
National Association of Realtors
Reported by Chris Moore