The US pending home sales for December 2021 from the national Association of realtors shows:
- Pending home sales -3.8% versus -0.9% estimate
- Prior month -2.2% revised to -2.3%. Contracts signings dropped in all the regions. Versus a year ago contracts were -2.7% lower
- YoY the pending home sales are down -6.9% versus December 2020
- NAR says that existing home sales are expected to decline by 2.8% in 2022 while home prices are expected to move higher by 5.1% due to housing shortage, even as builders ramp up production
- All four major regions posted month over month and year-over-year declines.
- Northeast fell -1.2%
- Midwest fell -3.7%
- South fell -1.8%
- West fell -10.0%
For the full report from the NAR, CLICK HERE
From the NAR:
"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."
Yun expects that the 30 year fixed mortgage rate will jump to 3.9% by the fourth quarter and that existing home sales to dip by 2.8% to 5.95 million units
Of note is pending home sales are a forward-looking housing indicator. It is based on contracts signings, not closings.
The overall US housing market continues to be influenced by low supply. However, higher prices and higher rates could/are starting to impact supply demand conditions as evident from this report. The index is down for the 2nd consecutive month. The 30 year fixed rate mortgage rate is up to 3.55%.
