Pending Sales Slide 7th Straight Month; Lowest in 2+ Years

Abnormal weather was partiallyrnblamed by the National Association of Realtors® (NAR) for a substantial drop inrnits December Pending Home Sales Index (PHSI). rnThe index, released this morning, fell 8.7 percent from November to 92.4rnin December, the lowest level since Octoberrn2011, when the index was 92.2.  ThernNovember index, previously reported to have broken a five month losing streakrnwith a slight increase from October to 101.7 was revised down today to 101.2rnmaking December is the 7^th consecutive month in which pending salesrnhave slipped.  The December number is 8.8rnpercent below the 101.3 level in December 2012. rn</p

NAR’s index is a forward-lookingrnindicator based on contract signings for the purchase of existing homes.  Sales transactions are generally expected tornclose within 60 days of contract signing.</p

Lawrence Yun, NARrnchief economist, said of the decline, “Unusually disruptive weather acrossrnlarge stretches of the country in December forced people indoors and preventedrnsome buyers from looking at homes or making offers.  Home prices rising faster than income is alsorngiving pause to some potential buyers, while at the same time a lack ofrninventory means insufficient choice.”  Hernadded that it could take several months to get a clearer read on marketrnmomentum but job growth and pent-up demand are positive factors.</p

The downturnrnin the PHSI was noted in all four regions. rnIn the Northeast it dropped 10.3 percent to 74.1 in December, and is 5.5rnpercent below a year ago.  In the Midwestrnthe index declined 6.8 percent to 93.6 in December, 6.9 percent below its levelrnin December 2012. Pending home sales in the South fell 8.8 percent to an indexrnof 104.9 in December, and are 6.9 percent below a year ago.  The West, which NAR says is most impacted byrnconstrained inventory, saw a decline of 9.8 percent in December to 85.7, and isrn16.0 percent below December 2012.</p

NAR says total existing-home sales this year should hold close to 5.1 million,rnessentially the same as 2013, but inventory remains limited in much of therncountry. The national median existing-home is projected to rise about 5.4rnpercent in 2014.

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