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Pending Homes Sales Unexpectedly Decline 3.8 Percent in December

Economists expected a 0.6 percent rise in pending sales. Instead the NAR reports a 3.8 percent decline.
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Data from the NAR, chart courtesy of Trading Economics. 

Data from the NAR, chart courtesy of Trading Economics. 

Pending Home Sales

Existing home sales are counted at closing. In contrast, new home sales are counted at contract signing.

The National Association of Realtors (NAR) posts a pending home sales report monthly. It's an preliminary count of signed contracts that acts as a leading indicator of existing home sales. 

The NAR newsroom reports Pending Home Sales Slide 3.8% in December.

The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

Key Highlights

  • Contract signings were 3.8% lower in December from the prior month.
  • Contract signings were down across all regions compared to the prior month and one year ago.
  • Existing-home sales are expected to decline by 2.8% in 2022, and home prices are expected to move higher by 5.1% due to the ongoing housing shortage, even as builders ramp up production. 

By Region 

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  • In the Northeast the pending home sales index fell 1.2 percent.
  • In the Midwest, the index dropped 3.7 percent.
  • In the South the index fell 1.8 percent.
  • In the West the index plunged 10.0 percent.

The index is volatile but the decline makes sense. Mortgage rates are going up and so are prices. 

It's increasingly more difficulty to come up with a down payment.

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