Following surprising spikes in both new and existing home sales, pending home sales in the US took a sharp 5.5% month-over-month dive in December, significantly below all expectations. This resulted in a 2.9% year-over-year drop in total sales, missing the anticipated 4.2% increase…
Source: Bloomberg
This marks the first month-over-month decline since July.
This decline has brought the total pending home sales index back to near record lows…
Source: Bloomberg
These numbers represent the lowest December print on record since data collection began in 2000…
Source: Bloomberg
It appears that the issue lies with affordability rather than the economy…
“Contract activity declined more significantly in the higher-priced regions of the Northeast and West, where increased mortgage rates have noticeably reduced affordability,” stated Lawrence Yun, NAR’s chief economist.
“It is uncertain if unusually heavy winter precipitation affected the timing of purchases.”
Sales have declined across all regions:
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Northeast saw an 8.1% month-over-month drop; November experienced a 1.3% decrease
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Midwest experienced a 4.9% month-over-month decline; November saw a 0.4% increase
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South saw a 2.7% month-over-month drop; November saw a 3.7% increase
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West experienced a significant 10.3% month-over-month decline; November saw a 0.5% increase
These latest statistics do not paint a promising picture for the upcoming year, especially after 2024 was marked as the worst year in the home resale market since 1995. Pending home sales are typically a leading indicator for previously owned homes, as properties usually go under contract a month or two before being sold.
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