Pending home sales slowed in December, as limited inventories of
low-priced homes limited choices for first-time buyers, the
National Association of Realtors (NAR) reported today.
Signed contracts for homes purchases were down a seasonally
adjusted 4.3 percent for the month, according to the NAR's index of
pending home sales, but still showed an annual increase of 6.9
percent compared to December 2011. That marks 20 consecutive months
in which pending home sales have increased on an annual basis.
Shortages of homes under $100,000
Edward Yun, NAR chief economist, said the main factor behind
December's monthly decline is a shortage of available homes in many
"Supplies of homes costing less than $100,000 are tight in much
of the country, especially in the West, so first-time buyers have
fewer options," Yun said. "We expect a seasonal rise of inventory
in the spring to help, but a seller's market may be
He said many parts of the western region of the country are
currently a seller's market for all but the most expensive homes,
while the Northeast is seeing a closer balance between supply and
A slowing rate of foreclosures has reduced the number of
bank-owned homes coming on the market, while many homeowners who
otherwise might be looking to sell are unable to because they are
underwater on their mortgages.
Yun said the NAR is predicting a 9 percent increase in home
sales in 2013, matching the 2012 rate of increases.
New home sales also down
News of the slowing pace of pending home sales comes on the
heels of Friday's announcement that the rate of new home sales also
fell in December, dropping a seasonally adjusted 7.8 percent from
the previous month, according to figures from the Census Bureau and
Department of Housing and Urban Development.
December sales were at an annual rate of 369,000 units, an 8.8
percent annual increase over the December 2011 rate. The agencies
estimate that a total of 367,000 new homes were sold in 2012, a
19.9 percent increase over the 306,000 reported for 2011.
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