December pending home sales slump
The number of Americans who signed contracts to buy homes fell in December after hitting the highest level in 1½ years in November. This pending sale is in Mount Lebanon, Pa. (Jan. 20, 2012) Credit: AP
The number of Americans who signed contracts to buy homes fell in December after hitting the highest level in a year and a half.
The National Association of Realtors says its index of sales agreements fell 3.5 percent last month to a reading of 96.6. That's down from November's reading of 100.1.
A reading of 100 is considered healthy.
The reading is still the second highest since April 2010, the last month buyers could qualify for a federal home-buying tax credit. After big gains in October and November, a modest correction “was always in the cards for December,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Contract signings indicate where the housing market is headed, but in recent months a growing number of buyers has canceled contracts at the last minute.
One-third of Realtors say they’ve had at least one contract scuttled in December, November and October, up from 18 percent in September.
Still, the rise in contracts is an indication the troubled housing market improved at the end of last year.
But further gains are needed to reduce the millions of unsold foreclosed homes sitting on the market, said Joshua Shapiro, chief U.S. economist at MFR Inc.
