December Pending Home Sales Slide on Supply Limitations

House for SaleThe National Association of Realtors (NAR) this morning released its data on pending home sales in December. The index fell 4.3% from a downwardly revised 106.3 in November to 101.7, and it is 6.9% higher than in December 2011 when the index reading was 95.1. The consensus estimate called for a slight decrease of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

The NAR's chief economist noted:

The supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis. … We expect a seasonal rise of inventory in the spring to help, but a seller's market may be developing. Much of the West is already a seller's market for homes priced under a million dollars, but conditions are much more balanced in the Northeast.

Pending sales fell most in the West - down 8.2% compared with November. In the Midwest sales improved 0.9% from November, and sales in the South declined 4.5%. Pending sales in the Northeast fell 5.4% month-over-month, but remained 8.4% higher than a year ago.

The NAR noted that existing home sales rose 9% in 2012, and the group expects a similar rise in sales this year.


Filed under: 24/7 Wall St. Wire, Housing, Research Tagged: featured
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