The National Association of Realtors (NAR) Thursday morning released its data on pending sales of existing homes for December. The pending home sales index rose by just 0.1% to 106.8 from a downwardly revised November reading of 106.7. This marks the first gain in the index in four months. The December reading is up 4.2% year over year.
The consensus estimate called for a month-over-month increase of 0.8% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 16 straight months.
The NAR’s chief economist noted:
Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month. Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With homebuilding still grossly inadequate, steady price appreciation and tight supply conditions aren’t going away any time soon.
Sales of existing homes closed 2015 at a pace of around 5.34 million, up 6.5%, and prices rose 6.8%. The national median home price is expected to rise 4% to 5% in 2016.
By region, December pending home sales increased by 6.1% to an index score of 97.8 in the Northeast, 15.3% higher than in December of 2014. In the South, sales fell 0.5% to an index score of 119.3 and are now 1% higher than the December 2014 index.
Sales dropped by 2.1% in the West to an index score of 97.5, but remain up 3.4% compared with December 2014. Sales in the Midwest fell 1.1% to a December index score of 103.6, 3.6% higher than December 2015.
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