The record-low weather temperatures freezing parts of the country the past month are hampering pending home sales.
“Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes and making offers,” says Lawrence Yun, chief economist for the National Association of REALTORS®.
Mixed with the cold weather, rising home prices, which are rising faster than incomes, are also giving “pause to some potential buyers, while at the same a lack of inventory means insufficient choice,” Yun says.
NAR reports that pending home sales dropped across all four regions of the country, falling 8.7 percent nationally in December from the previous month. NAR’s Pending Home Sales Index, a forward-looking indicator based on contracts and not closings, is 8.8 percent below year-ago levels. Pending home sales are at the lowest levels since October 2011, NAR reports.
Still, Yun notes, “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.”
Here’s a look at pending home sales in December across the country:
Northeast: Contracts dropped 10.3 percent in December and are 5.5 percent below year-ago levels;
Midwest: Contracts fell 6.8 percent in December and are 6.9 percent lower than December 2012;
South: Contracts fell 8.8 percent in December and are 6.9 percent below a year ago.
West: Faced with the most constrained inventory levels in the nation, contracts dropped 9.8 percent in December and are 16 percent below December 2012.