Pending Home Sales Edge Lower in December but Up 21.4% for all of 2020

The National Association of Realtors® (NAR) has reported their Pending Homes Sales Index (PHSI), which is based on signed real estate contracts, not actual closings, for existing single-family homes, condos, and co-ops, declined for the fourth straight month in a row failing -0.3% in December to a reading of 125.5. An index of 100 is equal to the level of contract activity in 2001. The NAR notes that while contract transitions fell in one of the four major U.S. regions, activity climbed or was flat in the remaining three areas. Year-over-year contract signings rose 21.4%. In prepared remarks to accompany the PHSI release, Lawrence Yun, NAR’s chief economist said, “Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale 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.”