Its Pending Homes Sales Index, a forward looking indicator based on contract signings, declined 3.5% to 96.6 in December from 100.1 in November but is 5.6% above December 2010 when it was 91.5.
But Lawrence Yun, NAR chief economist, said that the trend line remains positive. ‘Even with a modest decline, the preceding two months of contract activity are the highest in the past four years outside of the homebuyer tax credit period,’ he explained.
‘Contract failures remain an issue, reported by one third of realtors over the past few months, but home buyers are not giving up,’ he added.
Yun said some buyers successfully complete the sale after a contract delay, while others stay in the market after a contract failure and make another offer.
‘Housing affordability conditions are too good to pass up. Our hope is lending conditions will gradually improve with sustained increases in closed existing home sales,’ he concluded.
The PHSI in the Northeast declined 3.1% to 74.7 in December and is 0.8% below a year ago. In the Midwest the index rose 4% to 95.3 and is 13.3% higher than December 2010.
Pending home sales in the South slipped 2.6% to an index of 101.1 in December but are 4.9% above a year ago.
And in the West the index fell 11% in December to 107.9 but is 3.7% higher than December 2010.
