W
ASHINGTON (January 30, 2025) – The National Association of REALTORS reported a 5.5% decline in pending home sales for December, marking the first drop after four consecutive months of increases. All four U.S. regions experienced month-over-month losses, with the West experiencing the largest decrease.
The Pending Home Sales Index (PHSI), which tracks contract signings, fell to 74.2 in December, a year-over-year decline of 5.0%. This marks a significant drop from last year's cyclical low point in July 2024 at 70.2.
According to NAR Chief Economist Lawrence Yun, the decline is not entirely surprising given economic data rarely moves in a straight line. "High mortgage rates have not significantly dented housing demand due to greater numbers of cash transactions," he said.
The regional breakdown showed:
* The Northeast PHSI fell 8.1% from last month to 62.3, down 1.3% from December 2023.
* The Midwest index shrunk 4.9% to 74.3 in December, down 6.9% from the previous year.
* The South PHSI slipped 2.7% to 90.6 in December, down 5.1% from a year ago.
* The West index tumbled by 10.3% from the prior month to 57.7, down 5.1% from December 2023.
Yun noted that contract activity fell more sharply in high-priced regions like the Northeast and West, where elevated mortgage rates have reduced affordability. Job gains tend to have a greater impact in more affordable regions.
The National Association of REALTORS is America's largest trade association, involved in all aspects of residential and commercial real estate. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes.
