Pending Home Sales on the Rise

Pending home sales ended 2016 on an upswing, according to new data from the National Association of Realtors (NAR).

The Pending Home Sales Index (PHSI) increased 1.6 percent to 109.0 in December from 107.3 in November. The PHSI was also 0.3 percent the 108.7 level set in December 2015.

On a regional basis, the Northeast PHSI declined 1.6 percent to 96.4 and the Midwest PHSI dipped 0.8 percent to 102.7. But pending home sales in the South rose 2.4 percent to an index of 121.3 in December while the index in the West saw a five percent spike to 106.1.

“Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract,” said NAR Chief Economist Lawrence Yun. “The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.”