- Dennis Norman
The National Association of REALTORS Pending Home Sales Index for December shows an increase of 2.0 percent in the index from the month before (seasonally adjusted), and a 4.2 percent decrease from a year ago.
Here are highlights from the report:
- December’s pending home sales index (seasonally adjusted) was 93.7 (the index is based upon 100.0 being equal to the average level of sales activity in 2001 which we could call the last “normal” year) which is a 2.0 percent increase from the month before and a 4.2 percent decrease from a year ago.
- December’s not-seasonally adjusted index index was 60.9, a 19.8 percent decrease from the month before and a 3.4 percent decrease from a year ago.
- The South region had the highest month-over-month increase at 11.5 percent (seasonally adjusted) followed by the Midwest with an 8.0 percent increase and then the Northwest with a 1.8 percent month-over-month increase. The West region saw a slow-down in activity with a 13.2 percent decrease for the month.
- All regions saw year over year declines except the South which showed an increase of 1.7 percent from the year before.
Lawrence Yun, NAR chief economist for the National Association of REALTORS credits good affordability conditions and economic improvement. “Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we’ll continue to see a favorable environment for buyers with good credit,” he said.
“In the past two years, home buyers have been very successful, with super-low loan default rates, partly because of stable home prices during that time. That trend is likely to continue in 2011 as long as there is sufficient demand to absorb inventory,” Yun said. “The latest pending sales gain suggests activity is very close to a sustainable, healthy volume of a mid-5 million total annual home sales. However, sales above 6 million, as occurred during the bubble years, is highly unlikely this year.”
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