Housing market continues upward trend despite dip in home sales
US pending home sales dipped in December as inventory remained tight, but the upward trend in the housing market continued, the National Association of Realtors said Monday.
The NAR’s pending home sales index, an indicator of future sales, fell 4.3 percent to 101.7 in December, down from a 106.3 reading in November.
The decline, after three months of gains, surprised analysts who had estimated no change in pending home sales during the year-end holiday month.
December pending home sales still were up 6.9 percent from a year ago, the 20th consecutive month on the rise, NAR said.
“The supply limitation appears to be the main factor holding back contract signings in the past month,” said Lawrence Yun, NAR chief economist, adding: “Buyer interest remains solid.”
NAR said that even with some sellers remaining reluctant to put their homes up for sale more than six years after prices collapsed, pent-up demand and mortgage interest rates hovering at record lows point to continued improvement ahead.
Yun forecast existing-home sales to increase another 9 percent in 2013, following a 9 percent rise in 2012.
Barclays analyst Michael Gapen agreed the latest pending home sales numbers were a welcome sign.
“The broad trend in pending home sales mirrors that of the broader housing market,” he said. “The recovery in US housing has sustained momentum.”