If you need assistance, please call 317-590-2901

Pending Sales Prove Resilient Against Headwinds

Tuesday, January 31, 2017   /   by Carlos J Higareda

Pending Sales Prove Resilient Against Headwinds

Pending Sales Prove Resilient Against Headwinds

Pending home sales bounced back in December, despite ongoing inventory challenges and mortgage rate increases. Solid gains in contract signings in the South and West last month offset weakening activity in the Northeast and Midwest, the National Association of REALTORS® reported Tuesday.

Pending Home Sales By Region

Here is a closer look at pending home sales across the country:

  • Northeast: pending home sales dropped 1.6 percent to 96.4 in December, and are now 1.2 percent below a year ago.

  • Midwest: pending sales fell 0.8 percent to 102.7 in December, and are now 3.4 percent lower than a year ago.

  • South: pending home sales increased 2.4 percent to an index of 121.3 in December and are now 0.5 percent above a year ago.

  • West: pending home sales rose 5 percent in December to 106.1, and are also 5 percent higher than a year ago.

Source: National Association of REALTORS®’ Pending Home Sales Index

NAR’s Pending Home Sales Index – a forward-looking indicator based on contract signings – rose 1.6 percent to 109 in December over November’s reading. The index is just 0.3 percent higher than last December.

“Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract,” says Lawrence Yun, NAR’s chief economist. “The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs. Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.”

Most of the supply in housing currently rests in the upper tier of the market, Yun says. Sales were up around 10 percent in December 2016 compared to a year ago for homes that sold at or above $250,000. Homes that sold between $100,000 and $250,000, on the other hand, increased only 2.3 percent.

Inventories of homes for sale under $100,000 remain constrained. Inventories below $100,000 were down 11.6 percent compared to a year ago.

“The dismal number of listings in the affordable price range is squeezing prospective first-time buyers the most,” Yun says. “As a result, young households are missing out on the wealth gains most homeowners have accrued from the 41 percent cumulative rise in existing home prices since 2011.” 

Nevertheless, NAR predicts a solid year for home sales this year. Existing-home sales are forecast to increase 1.7 percent from 2016 to settle in around 5.54 million for 2017, NAR predicts. The median existing-home price is expected to rise about 4 percent.

Yun predicts housing starts to surge to about 1.26 million units this year, a nearly 8 percent gain over 2016. That would be welcome news to markets facing severe housing shortages.

“Especially if construction-related regulations are relaxed, all eyes will be on the homebuilding industry this year to see if they can finally start making up lost ground on the severe housing shortages impacting much of the country,” Yun says.

Source: National Association of REALTORS®

eXp Realty
Carlos Higareda
107 N State Road 135
Greenwood, IN 46142

The source of the Licensed Listings is BLC® listing service. The Licensed Listings are confidential information of BLC® listing service. The BLC® listing information is provided by the Metropolitan Indianapolis Board of REALTORS® from a copyrighted compilation of listings. The compilation of listings and each individual listing are © 2024 Metropolitan Indianapolis Board of REALTORS® All Rights Reserved. The information provided is for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All properties are subject to prior sale or withdrawal. All information provided is deemed reliable but is not guaranteed accurate, and should be independently verified.
This site powered by CINC: www.cincpro.com