The number of homes under contract to sell measurably dropped in December, as abnormal weather kept buyers from venturing out to shop for homes in much of the U.S., according to the NATIONAL ASSOCIATION OF REALTORS®.
NAR’s Pending-Home Sales Index fell 8.7% in December and is 8.8% below December 2012.
The PHSI measures the number of homes that are under contract to sell, where the deal hasn’t yet reached the closing table.
Several factors worked against buyers last month, said NAR Chief Economist Lawrence Yun. “Unusually disruptive weather … forced people indoors and prevented some buyers from looking at homes or making offers,” he said. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice.”
“Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors,” added Yun.
The PHSI fell in all four regions:
|Northeast||Down 10.3%||Down 5.5%|
|Midwest||Down 6.8%||Down 6.9%|
|South||Down 8.8%||Down 6.9%|
|West||Down 9.8%||Down 16.0%|
How Many Home Sales Predicted for 2014?
NAR is projecting 5.1 million existing homes will sell this year, about the same as in 2013. However, the inventory of homes for sale is limited in many parts of the country, which can slow home sales. The Western U.S. has been especially influenced by tight inventory, Yun said.
NAR predicts the national median existing-home price will rise 5.4% in 2014.