Dec. Pending Home Sales Dipped 0.3% from Nov. but Rose 21.4% YOY
Washington, DC, January 29, 2021-The Pending Home Sales Index (PHSI) waned 0.3% to 125.5 in December, according to the National Association of Realtors. Year-over-year, contract signings jumped 21.4%. An index of 100 is equal to the level of contract activity in 2001.
"Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale," said 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."
"This elevated demand without a significant boost in supply has caused home prices to increase and we can expect further upward pressure on prices for the foreseeable future," Yun said.
Yun continues to project that 2021 will bring about strong economic growth, supported by low mortgage rates and fiscal stimulus, which in turn will bolster existing-home sales.
Yun added that, with rates to remain low, existing-homes sales are likely to reach 6.49 million, which would be a 15% increase from 5.64 million in 2020. "There will also be slower home price appreciation, likely 6.6%, as increased confidence from homebuilders will ultimately lead to an increase in housing starts."