Pending Home Sales Index Falls 1.5%: NAR

Pending home sales decreased 1.5% in December to a reading of 85.9, from a downwardly revised 87.2 in November, according to an index released yesterday by the National Association of Realtors.

November’s number was first reported as 87.6. But year-over-year the pending homes sales index was down 24.2% in December.

Regionally, the Northeast saw sales decline 1.7%, the West saw a 3.1% dip, and in the South sales fell 3.0%, while sales in the Midwest rose 3.4%.

“Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,” said NAR chief economist Lawrence Yun.

“Existing-home sales have moved narrowly since last September, but when the full impact of higher loan limits for conventional mortgages begins to impact the market there is likely to be a notable rise in home sales and prices,” he added. “If higher limits are enacted very quickly, we’ll see a faster and more meaningful recovery by expanding safe, affordable financing in high-cost areas — that, in turn, would help to stimulate overall economic activity.”

Existing-home sales for 2007 are projected to total 4.9 million in the first half of this year, then edge up to 5.80 million in the last half of this year and 5.6 million in 2009, NAR said.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER