Pending home sales in the United States fell for the first time since July, creating new worries for buyers and sellers alike.
Key Facts:
- Contract signings declined 5.5% to 74.2 in December, per the National Association of Realtors (NAR).
- The West and Northeast saw the biggest monthly drops since 2022.
- Lawrence Yun, NAR’s chief economist, said elevated mortgage rates and the high cost of homes are cutting into affordability.
- Mortgage rates that sat just above 6% in September have since climbed past 7%.
- Last month’s figures suggest challenges for 2025, following what NAR calls the worst year in the home resale market since 1995.
The Rest of The Story:
According to the latest NAR index, pending sales had been steady or rising since July, but December’s data shows a noticeable pause.
The largest contractions appeared in areas where real estate is already expensive, such as the Northeast and the West.
Yun noted that high mortgage rates and higher home prices combined to limit what many buyers can afford.
This comes as nationwide housing costs still went up 3.8% in November compared to a year earlier, based on the S&P CoreLogic Case-Shiller Index.
Mortgage rates, once dipping closer to 6%, are now above 7%.
That puts added pressure on buyers and may lead to fewer overall sales in early 2025.
The South and Midwest, which are significant regions for single-family homes, also experienced a drop in pending contracts.
Commentary:
It is disappointing to see housing contract signings fall again, especially when many families are hoping to purchase a home.
However, we can remain optimistic that President Trump’s policies, once fully in effect, might help bring down borrowing costs and improve affordability in the housing market.
We look forward to seeing if stronger economic measures will soften mortgage rates or boost consumer confidence in the months ahead.
Families deserve fair access to homeownership, and we are hopeful that this downturn will begin to turn around soon.
The Bottom Line:
Pending home sales took a step back in December, mainly because of higher mortgage rates and rising home costs.
These signals raise concerns about 2025’s housing market, but some hope remains if future policies ease financial pressures on buyers.
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