Pending Home Sales Tumble to Lowest in Nearly Five Years in December
Pending Home Sales Tumble to Lowest in Nearly Five Years in December
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The numbers: Pending-home sales slid 2.2% in December to a reading of 99, and were 9.8% lower compared to a year ago, marking the 12th straight month of annual declines, the National Association of Realtors said Wednesday.
That’s the lowest reading since April 2014.
What happened: NAR’s index, which tracks home contract signings, missed the Econoday consensus for a 0.3% monthly increase. Given all the headwinds facing the housing market at the end of last year, that forecast may have been too rosy.
In December, the pending home sales index for the Northeast was up 2%. The index for the West were also up moderately, by 1.7%. But pending sales plummeted in the South by 5%, and in the Midwest by 0.6%.
Big picture: The Realtor group named a litany of culprits for the steep decline in December: the stock market correction, high home prices and mortgage rates, lean inventory, and even the government shutdown.
Contract signing usually precede closing by about 45 days, so the pending home sales index is a leading indicator for upcoming existing-home sales reports.
Market reaction: The Dow Jones Industrial Average was little changed after the NAR release. The Dow has climbed over 5% this month.
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