Pending home sales fell sharply in December as cold weather and declining affordability sapped demand, according to a trade group.
The National Assn. of Realtors said Thursday that its pending sales index, which is adjusted for seasonal swings, fell 8.7% from November, reaching the lowest level since October 2011. The index, based on contracts signed but not closed, is 8.8% below December 2012.
“Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers,” the association's chief economist, Lawrence Yun, said in a statement. “Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice.”
Pending home sales fell in all regions. In the western United States, signed contracts for previously owned homes dropped 9.8% from November.
December's national index level was 92.4. A level of 100 equals the average contract activity in 2001, a year when existing home sales reached a level that would be healthy based on today's population, the Realtors say.