US Pending Home Sales Puked In December, Realtors Blame Rising Rates

Despite an unexpected surge in new-home-sales, pending-home-sales puked in December, tumbling 3.8% MoM (after falling 2.3% MoM in November)…

Source: Bloomberg

That is the biggest MoM drop since Feb 2021 and pushed the YoY drop back into the red (down 6.64%).

“Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options,” Lawrence Yun, NAR’s chief economist, said in a statement. 

“Mortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers.”

Sales dropped in every region:

• Northeast fell 1.2% m/m; Nov. fell 0.1%

• Midwest fell 3.7% m/m; Nov. fell 6.1%

• South fell 1.8% m/m; Nov. fell 1%

• West fell 10% m/m; Nov. fell 2.1%

This may be a big problem for Powell as pending home sales are often looked to as a leading indicator of existing-home purchases given properties typically go under contract a month or two before they’re sold