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The National Association of Realtors (NAR) Monday morning released its data on pending sales of existing homes for December. The pending home sales index rose 1.6 points (up 1.5%) to 110 from an unrevised November reading of 107.3. The December reading is up 0.3% year over year.
December sales in two of four NAR regions were higher year over year, with a sharp pop in the West leading the way.
The consensus estimate called for a month-over-month increase of 0.6 points in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 28 straight months.
The NAR’s chief economist, Lawrence Yun, noted:
Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract. 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.
Yun also noted that December homes sold for more than $250,000 were 10% higher than the December 2015 sales total, while sales of homes priced between $100,000 and $250,000 rose just 2.3%. Sales of homes priced below $100,000 fell 11.6% year over year. First-time buyers are particularly hard hit by the lack of affordable inventory.
By region, December pending home sales decreased by 1.6% to an index score of 96.4 in the Northeast, down 1.2% compared with December 2015. In the South, sales rose 2.4% to an index score of 121.3, 0.5% higher than last year’s index.
Sales rose by 5% in the West to an index score of 106.1, up 5% year over year for the month, and sales in the Midwest fell by 0.8% to a December index score of 102.7, now 3.4% lower than December 2015.
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