Despite drop, NAR says the figure is still the "highest ever recorded in the month"
The number of pending home sales fell slightly in December, according to data from the National Association of Realtors (NAR).
The NAR’s Pending Home Sales Index (PHSI) declined 0.3% to 125.5 in December – the fourth consecutive month of decline after an unseasonal surge in August.
Read more: NAR sees minor decline in pending home sales in September
However, NAR said that last month was still the “highest ever recorded month of December” – with contract signings jumping 21.4% compared to the same period in 2019.
“Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale," said Lawrence Yun, chief economist at NAR. “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 that he expects 2021 to bring about strong economic growth, supported by low mortgage rates and fiscal stimulus – which in turn will bolster existing-home sales.
"I expect the 30-year fixed mortgage rate to average 3%, with the Federal Reserve refraining from any rate increases this year," said Yun. "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."
