The residential housing market experienced many positive conditions since the end of the recession, though there are still hurdles present.
One of these is the level of pending home sales, as the figure fell 8.7 percent in December to 92.4 on the National Association of Realtors’ Pending Home Sales Index. In November, the figure was 101.2. The latest level brought it to the lowest point since October 2011, when the figure reached 92.2. December’s level also was 8.8 percent lower than the same month in 2012.
When looking regionally, the Northeast had the most significant decline in pending sales month-over-month, as it fell 10.3 percent from November’s level, the report showed. The Midwest had the lowest monthly slide, though it still slipped 6.8 percent. Both the South and the West had declines, as these measurements dropped 6.9 percent and 9.8 percent, respectively.
“Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” said Lawrence Yun, chief economist for NAR. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors.”
Existing-home sales improve to end 2014
While pending sales may signal a drop in transactions in the next few months, existing-home sales remained strong. According to a separate report from NAR, the reading improved 1 percent in December to 4.87 million units from November’s 4.82 million units. Despite the gain, it was still 0.6 percent lower than in December of the previous year, as that level was 4.9 million units.
“Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” said Yun. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”
Prices also managed to climb in December. The report added that the national median home price reached $197,100, 11.5 percent improved from the same point in 2012. The last time prices jumped so significantly was in 2005. That year experienced a gain of 12.4 percent.