Pending home sales down 3.5% in December
Pending home sales fell 3.5% in December after climbing to the highest level in 19 months in November, according to the National Association of Realtors. The large trade association, which has more than 1.1 million members, said its pending home sales index based on contracts signed decreased to 96.6 for the final month of 2011 from 100.1 the prior month. NAR said the index is 5.6% higher than 91.5 in December 2010. Analysts surveyed by Econoday projected a decline of 1% for December with a range of estimates between a decrease of 4.8% and a gain of 7%. The index last topped 100 in April 2010 when it hit 111.5, buoyed by the effects of the federal homebuyer tax credit. "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," NAR chief economist Lawrence Yun said. "Contract failures remain an issue, reported by one-third of Realtors over the past few months, but homebuyers are not giving up." He said the affordability conditions are "too good to pass up," and some buyers complete a transaction after a delay, while others make another offer. NAR anticipates increases in existing home sales from gradually improving lending conditions. The pending home sales index for the Midwest rose 4% in December from November, while the index fell in other parts of the country. In the Northeast, the index declined 3.1% from the prior month. In the West, it decreased 11% from November, but is 3.7% higher than a year earlier. Pending sales in the South dropped 2.6% from November but rose 4.9% from a year earlier. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw.