U.S. pending home sales drop slightly more than forecast in December

U.S. pending home sales drop slightly more than forecast in December

The National Association of Realtors (NAR) announced on Friday its seasonally adjusted pending home sales index (PHSI) slipped 0.3 percent m-o-m to 125.5 in December, after a revised 2.5 percent m-o-m drop in November (originally a 2.6 percent m-o-m decline). This marked the fourth consecutive monthly drop in the value of the index.

Economists had expected pending home sales to edged down 0.1 m-o-m in December.

On y-o-y basis, the index surged 21.4 percent, following a revised 16.6 percent jump in November (originally a 16.4 percent m-o-m climb).

According to the report, two of all four regional indices recorded month-over-month increases in December, but all four regions rose at double-digit rates from one year ago.

The index in the Midwest dropped 3.6 percent m-o-m to 111.7 last month, up 13.9 from December 2019. Meanwhile, the index in the West was flat m-o-m in December, holding at 111.3, which was up 18.9 percent from a year ago. The Northeast PHSI went up 3.1 percent m-o-m to 112.0 in December, a 22.1 percent surge from a year ago. Pending home sales in the South edged up 0.1 percent m-o-m to an index of 150.6 in December, up 26.6 percent from December 2019.

"Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale," noted Lawrence Yun, NAR's chief economist. "There is a high demand for housing and a great number of would-be buyers, and therefore sales should rise with more new listings."