Pending home sales defied predictions of a rebound at year-end, falling by 3.9 percent compared with a downwardly revised November estimate, data from the National Association of Realtors showed Thursday.
Compared with a year ago, pending home sales fell 6.9 percent. Sales were down by 10 percent or more in both the Northeast and the West. Sales fell in the Midwest and the South, as well.
The downturn largely reflects an extremely low supply of homes for sale, according to NAR economist Lawrence Yun.
“Pending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options,” Yun said. “Mortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers.”
Home sales are expected to contract further this year. Sales are forecast to be down by three percent in 2022 compared with last year, according to Yun.
“The market will likely endure a minor reduction in sales as mortgage rates continue to edge higher,” Yun said.
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