Share this article!

After four consecutive months of increasing sales volume, pending home sales sank by 5.5% in December.

The National Association of Realtors’ (NAR) Pending Home Sales Index fell to 74.2 from November into December. Year-over-year, pending transactions declined 5.0%. An index of 100 is equal to the level of contract activity in 2001. All four regions experienced both month-over-month and year-over-year losses in transactions.

“After four straight months of gains in contract signings, one step back is not welcome news, but it is not entirely surprising,” said NAR Chief Economist Lawrence Yun. “Economic data never moves in a straight line. High mortgage rates have not significantly dented housing demand due to greater numbers of cash transactions.”

“Contract activity fell more sharply in the high-priced regions of the Northeast and West, where elevated mortgage rates have appreciably cut affordability,” Yun added. “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.”