Dive Brief:
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History-making low mortgage rates have not convinced would-be homeowners to sign contracts and move. The National Association of Realtors reported last week that pending home sales fell 3.7% in December.
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Although pending sales are a predictor of future sales, the association still predicted a rebound in 2015, with sales of existing homes rising by 6.6%. NAR Chief Economist Lawrence Yun chalked the decline up to the normal lag in sales during the winter, the lowest inventory of homes for sale in 16 months, and slightly accelerating prices.
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Every region of the country experienced declines in pending sales for the month, the Pending Home Sales Index revealed.
Dive Insight:
For sales to grow, two groups of potential homebuyers need to start signing contracts. First, if current homeowners become satisfied with the equity they have gained over the past couple of years, they will put their homes on the market and buy bigger or more expensive abodes. Second, economists are counting on first-time homebuyers to take advantage of low interest rates, less-expensive mortgage insurance, and the new, low down payments.