December Pending Home Sales Mostly Flat

Pending home sales were largely unchanged in December despite increased activity in the Northeast, the National Association of Realtors reported yesterday.  

The Pending Home Sales Index, a forward-looking indicator based on contract signings, edged up by 0.1 percent to 106.8 in December from a downwardly revised 106.7 in November; it improved by 4.2 percent from a year ago (102.5). NAR said the index has increased year-over-year for 16 consecutive months.  

Regionally, only the smallest, the Northeast, saw improvement, increasing by 6.1 percent to 97.8 in December, and by 15.3 percent from a year ago. In the Midwest the index decreased by 1.1 percent to 103.6 but remained 3.6 percent higher than a year ago. In the South, pending home sales declined by 0.5 percent to 119.3 but improved by 1.0 percent from a year ago. The West decreased by 2.1 percent to 97.5, but was 3.4 percent above a year ago.  

NAR Chief Economist Lawrence Yun said contract activity closed out the year on stable footing but lost some momentum. “Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month,” he said. “Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With homebuilding still grossly inadequate, steady price appreciation and tight supply conditions aren’t going away any time soon.”