House hunters signed 2.2 percent fewer contracts to buy existing homes in December, according to the National Association of Realtors.
These so-called pending sales are a future indicator of closings in one to two months. The Realtors’ pending home sales index was also down a dramatic 9.8 percent compared with December 2017.
This kind of marks 12 straight months of annual declines. the item will be also the lowest December sales reading since 2013.
Some observers expected sales to get a boost in December through a drop in interest rates. Mortgage rates moved markedly lower to end 2018, with the average rate on the well-liked 30-year fixed loan falling through just over 5 percent in mid-November all the way to 4.61 percent by Dec. 31, according to Mortgage News Daily.
Buyers had been struggling with high prices along with higher rates for most of last year, along with home sales declined as a result.
“The stock market correction hurt consumer confidence, record high home prices cut into affordability along with mortgage rates were higher in October along with November for consumers signing contracts in December,” said the Realtors’ chief economist, Lawrence Yun, in a Discharge, suggesting which perhaps buyers were not aware of the lower rates.
The partial government shutdown, which concluded last week after a record-long 35 days, could not have figured much into these numbers, as the item didn’t begin until toward the end of December.
“Seventy-5 percent of Realtors reported which they haven’t yet felt the impact of the government closure. However, if another government shutdown takes place, the item will lead to fewer homes sold,” Yun added. President Donald Trump along with lawmakers agreed to reopen the government until Feb. 15, with the intention of reaching a longer-term funding deal before which deadline.
Regionally, pending home sales from the Northeast rose 2.0 percent month to month, along with were 2.5 percent below a year ago. from the Midwest, sales fell 0.6 percent monthly along with 7.2 percent annually. Sales from the South fell 5 percent monthly along with 13.5 percent annually, along with from the West sales increased 1.7 percent monthly however were 10.8 percent lower compared with December 2017.
Closed sales of existing homes, which represent contracts signed in October along with November, were also sharply lower in December, as the median home cost hit a fresh high.
The housing market has been plagued by a very tight supply of entry-level homes as well as very low levels of fresh construction. While the supply of homes for sale will be increasing slightly, the growth will be mostly at the move-up along with luxury levels.