The Pending Residence Gross sales Index (PHSI), which tracks contract signings as a measure of future house gross sales, fell 5.5 p.c to 74.2 in December, in keeping with information launched Thursday by the Nationwide Affiliation of Realtors.
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Homebuyers are retreating from the market as pending house gross sales declined in December, reversing the earlier 4 months of progress, in keeping with new information launched by the Nationwide Affiliation of Realtors on Thursday.
The Pending Residence Gross sales Index (PHSI), which tracks contract signings as a measure of future house gross sales, fell 5.5 p.c to 74.2 in December. Yr-over-year contract signings additionally dropped by 5.0 p.c.
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NAR Chief Economist Lawrence Yun famous that this shift isn’t completely sudden as a result of “economic data never moves in a straight line.”
Lawrence Yun
“After four straight months of gains in contract signings, one step back is not welcome news, but it is not entirely surprising,” Yun stated. “High mortgage rates have not significantly dented housing demand due to greater numbers of cash transactions.”
All 4 U.S. areas registered declines in pending house gross sales in comparison with November, with the West experiencing the sharpest drop. Contract signings additionally continued their year-over-year decline, with the Midwest now main in losses.
Within the Midwest, the PHSI dropped 4.9 p.c to 74.3 in December, reflecting a 6.9 p.c decline from December 2023. The Northeast noticed an 8.1 p.c month-to-month decline to 62.3, down 1.3 p.c from the earlier 12 months.
Within the South, the PHSI decreased by 2.7 p.c to 90.6 in December, a 5.1 p.c drop from the earlier 12 months, whereas the West noticed probably the most vital month-to-month decline, falling 10.3 p.c to 57.7, additionally down 5.1 p.c from December 2023.
“Contract activity fell more sharply in the high-priced regions of the Northeast and West, where elevated mortgage rates have appreciably cut affordability,” Yun defined. “Job gains tend to have greater impact in more affordable regions. It is unclear if heavier-than-usual winter precipitation impacted the timing of purchases.”
