Home Sales Fall in December
The National Association of Realtors just reported that pending home sales nationally fell to the lowest point since October 2011.
Although the Association tried to attribute the December decline to nasty weather conditions across the country, the fact remains that this was the seventh straight monthly decline for the index!
Also, one should keep in mind that these pending home sales (signed contracts to buy previously occupied homes) numbers usually have a one or two months lag in reporting. This is another reason why the December whether cannot be the major cause for the decline in the index.
The December national drop in home sales was so steep that it led to a year-over-year drop of 8.8 percent. The number of signed contracts tumbled in the Northeast (-10.3%), Midwest(-6.8%), South(-8.8%) and West(-9.8%) in December.
So, back to my point that this decline was really not attributable to nasty weather, if one looks at the 9.8% drop in the West, where we had one of the mildest Decembers on record, the National Association of Realtors explanation just does not ring true!
Just perhaps the standard nemesis of the real estate market rising interest rates and the fact that investors, having made the easy money, have cooled on continued, single-family home investing, are the real cause for the continuing drop in this index!
