Pending Home Sales Take a Tumble
January 29, 2020
Pending home sales ended 2019 on the downside, according to newly released data from the National Association of Realtors (NAR).
The Pending Home Sales Index (PHSI) recorded a 4.9 percent slump to 103.2 in December. On a year-over-year basis, however, contract signings were up by 4.6 percent.
All four regional indices were down last month: The Northeast PHSI tumbled by four percent to 92.4, the Midwest index dropped 3.6 percent to 98.8 last month, the South saw its index drop by 5.5 percent to a 118.1 reading and the PHSI in the West fell 5.4 percent to 93.1.
“Mortgage rates are expected to hold under four percent for most of 2020, while net job creation will likely exceed two million,” said Lawrence Yun, NAR’s chief economist. “Due to the shortage of affordable homes, home sales growth will only rise by around three percent.”
But Yun also found a silver lining in this data, noting that “national median home price growth is in no danger of falling due to inventory shortages and will rise by four percent. The new home construction market also looks brighter, with housing starts and new home sales set to rise six percent and 10 percent, respectively.”
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