December pending home sales in the US fell steeply, says the National Association of Realtors, which stressed that abnormal weather conditions throughout the country inhibited house hunting.
December pending home sales declined in the four major regions of the country.
The Pending Home Sales Index, which is based on the number of contract signings, declined to 92.4, a fall of 8.7% compared to November’s 101.2.
The Index for December was 8.8% lower than December 2012 (101.3).
The National Association of Realtors (NAR) says their data refer to contracts and not closings, and are at their lowest level since October 2011 (92.2).
Disruptive weather inhibited December’s housing market
NAR Chief Economist, Lawrence Yun, explains that a number of factors are working against home buyers:
“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.”
“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.”
(Source: National Association of Realtors)
Below is a breakdown of the Pending Home Sales Index (PHSI) according to regions:
- The Northeast Index – fell 10.3% in December to 74.1, and was 5.5% below December 2012.
- The Midwest Index – dropped 6.8% in December to 93.6, and was 6.9% below its December 2012 level.
- The South Index – fell 8.8% in December to 104.9, and was 6.9% lower than in December 2012.
- The West Index – declined 9.8% in December to 85.7, and was 16% lower than in December 2012. The West has been the most affected by constrained inventory.
Total existing-home sales volume in 2014 should stay around 5.1 million, about the same as in 2013. However, in most of the country inventory remains limited.
Existing-home prices are forecast to increase by approximately 5.4% in 2014.