The pending home sales in the US fell by 3.8% in December from November, with contract signings declining across all regions. SPY is up +0.82%, DXY is up +0.81%.
- On a year over year basis, contract signings for new homes fell by 6.9%.
- The decline in pending home sales reflected diminishing supply, with few units available for buyers.
- NAR’s chief economist Lawrence Yun expects the recent surge in mortgage rates to push aside marginal buyers. Yun expects a 2.8% reduction in existing home sales as mortgage rates continue to soar.
- Yun says despite the December slowdown, 2021 posted a strong year in home transactions. He expects housing starts to rise to 1.65 million, while home prices are expected to surge by 5.1% in 2022.
- The NAR economist expects rising house supply and more measured demand to play a role in bringing house prices in line with the wage increases.