Home sales fall in December
But sales up on yearly basis
Pending home sales decreased month-over-month in December, the National Association of Realtors (NAR) said in a recent report.
According to the NAR, pending home sales declined 4.3 percent on a monthly basis in December. The NAR’s Pending Home Sales Index (PHSI) dropped to 101.7 in December after registering at 106.3 in November
However, despite the monthly decline, pending home sales for December were still 6.9 percent above what was seen a year earlier in December 2011 (PHSI of 95.1).
This marks the 20th straight month of year-over-year increases, the NAR noted.
“The supply limitation appears to be the main factor holding back contract signings in the past month,” Lawrence Yun, NAR chief economist, said in a statement. “Still, contract activity has risen for 20 straight months on a year-over-year basis,”
Yun elaborated: “Buyer interest remains solid, as evidenced by a separate Realtor® survey which shows that buyer foot traffic is easily outpacing seller traffic.”
Inventory shortfalls may be holding back sales numbers in some parts of the country.
“Supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first-time buyers have fewer options,” Yun said.
Regional results mostly negative
Pending home sales in the Midwest increased 0.9 percent in December and came in 14.4 percent higher than a year earlier in December 2011. This was the only major U.S. region to see a monthly increase; the other three main regions all saw monthly declines.
The West saw the largest decrease in month-over-month pending home sales of 8.2 percent in December and currently sits 5.3 percent under where it was a year ago.
The Northeast saw a 5.4 percent decline in December but came in 8.4 percent above the previous December, while the South dropped 4.5 percent on a monthly basis but came in 10.1 percent higher on a yearly basis.
“We expect a seasonal rise of inventory in the spring to help, but a seller’s market may be developing,” Yun said. “Much of the West is already a seller’s market for homes priced under a million dollars, but conditions are much more balanced in the Northeast.”