The National
Association of Realtors (NAR) reported on Thursday its seasonally adjusted
pending home sales index (PHSI) plunged by 5.5 per cent m-o-m to 74.2 in December
2024,
following a downwardly revised 1.6 per cent m-o-m rise (from +2.2 per cent
m-o-m) in November 2024. This was the first decrease in the indicator in five
months.
Economists had expected
pending home sales to remain unchanged in the final month of 2024.
On a y-o-y
basis, the index tumbled 5.0 per cent after an unrevised 6.9 per cent surge in November. This marked the first annual drop since August 2024
(-3.0 per cent).
According to
the report, all four
regional indices - the Northeast PHSI (-8.1 per cent m-o-m and -1.3 per cent
y-o-y), the Midwest PHSI (-4.9 per cent m-o-m and -6.9 per cent y-o-y), the
South PHSI (-2.7 per cent m-o-m and -5.1 per cent y-o-y) and the West PHSI (-10.3
per cent m-o-m and -5.1 per cent y-o-y) - posted declines both in m-o-m and
y-o-y terms in December.
Commenting on the latest report, Lawrence Yun, NAR’s chief economist,
noted that after four straight months of gains in contract signings, one step
back is not welcome news, but it is not entirely surprising. “Economic data
never moves in a straight line,” he added. “High mortgage rates have not
significantly dented housing demand due to greater numbers of cash transactions.”