Pending home sales decrease again amid slight housing market cooldown
Latest pending home sales figures revealed.
Fewer homebuyers signed contracts to buy homes in December, the National Association of Realtors reported.
US pending home sales, or transactions based on contract signings, fell 3.8% month over month and 6.9% year over year to 117 in December – marking the second consecutive month of decline.
NAR chief economist Lawrence Yun said that sales were hindered by a “diminished housing supply” and a mortgage rate hike that will “ultimately push aside marginal buyers.” Despite the downturn in December, Yun pointed out that 2021 was still a great year for housing in terms of sales and price appreciation.
“The market will likely endure a minor reduction in sales as mortgage rates continue to edge higher,” Yun added.
Yun expects the rate for the 30-year fixed loan to reach 3.9% by the fourth quarter and existing-home sales to drop by 2.8% to 5.95 million units. Yun, however, is optimistic that housing inventory will improve significantly and contribute to slower home price growth this year. He predicts housing starts will continue to increase to 1.65 million units and home price gains to moderate at a 5.1% rate.
“The combination of a more measured demand and rising supply will bring housing prices better in line with wage growth,” Yun said.
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