Skip to main content

NAR: Pending Home Sales Slid 3.8% In December

David Krechevsky
Jan 27, 2022
NAR

Contract signings fall for second straight month as all four U.S. regions posted monthly and yearly declines.

KEY TAKEAWAYS
  • Contract signings were 3.8% lower in December from the prior month and 6.9% from a last year.
  • Contract signings were down across all regions compared to the prior month and one year ago. 
  • Existing-home sales are expected to decline by 2.8% in 2022.

Pending home sales fell in December for the second straight month, according to the National Association of Realtors (NAR). All four major U.S. regions posted both month-over-month and year-over-year drops in contract activity.

The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 3.8% to 117.7 in December, the NAR said. Year-over-year, transactions decreased 6.9%. An index of 100 is equal to the level of contract activity in 2001.

"Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options," said Lawrence Yun, NAR's chief economist. "Mortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers."

Even with December's slowdown in transactions, last year was an overall great period for housing in terms of sales and price appreciation, Yun said. "The market will likely endure a minor reduction in sales as mortgage rates continue to edge higher," he added.

Yun forecasts the 30-year fixed mortgage rate to jump to 3.9% by the fourth quarter of 2022, and existing-home sales to dip by 2.8% to 5.95 million units.

With December marking a third straight month of increased home construction, Yun said he expects housing inventory to continue improving and to contribute to slower home price growth this year. He forecasts housing starts to rise to 1.65 million units and home prices to increase 5.1%.

"The combination of a more measured demand and rising supply will bring housing prices better in line with wage growth," Yun said.

Realtor.com's Hottest Housing Markets data in December showed that, out of the largest 40 metros, the most improved markets over the past year were Orlando-Kissimmee-Sanford, Fla.; Tampa-St. Petersburg, Fla.; Jacksonville, Fla.; Dallas-Fort Worth-Arlington, Texas; and Denver-Aurora-Lakewood, Colo.

Regional breakdown

Month-over-month, the Northeast PHSI fell 1.2% to 98.2 in December, a 10.5% decline from a year earlier. In the Midwest, the index dropped 3.7% to 112.8 last month, down 1.2% from December 2020.

Pending home sales transactions in the South slid 1.8% to an index of 145.2 in December, down 3.9% from December 2020. The index in the West decreased 10.0% in December to 95.0, down 16.2% from a year prior.

The National Association of Realtors is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

 

Published
Jan 27, 2022
FICO Increases 400% For Tier 3 Lenders

Finding solutions in soft pull credit reports

Analysis and Data
Jan 27, 2023
NAR: Pending Home Sales Rose In December

Redfin report also shows year-over-year improvement.

Analysis and Data
Jan 27, 2023
Mortgage Rates Fall For 3rd Straight Week

Freddie Mac says lower rates are attracting more buyers to the market.

Analysis and Data
Jan 26, 2023
New Home Sales End Down Year On Up Note

For all of 2022, sales of new homes fell 16.4%.

Analysis and Data
Jan 26, 2023
Mortgage Application Payments Fell 2.9% In December

The median payment fell to $1,920 in December from $1,977 in November. 

Analysis and Data
Jan 26, 2023
ATTOM: Home-Seller Profits Top 50% In 2022

Profits on typical sales increase between 45% and 51% nationwide.

Analysis and Data
Jan 26, 2023