In December 2024, pending home sales in the U.S. fell by 5.5%, signaling a downturn after four months of growth. The National Association of Realtors reports that climbing mortgage rates, currently around 7%, have caused buyers to pull back, leading to the most significant annual dip in contract signings since July. All regions experienced declines, with the West showing the largest month-over-month decrease of 10.3%. As these pending sales are predictors of future home sales, the market faces uncertainty, influenced by new administration policies and rising rates.
Pending home sales, or contract signings, measure the first formal step in a home sale transaction-the point when a buyer and seller have agreed on the price and terms.
Pending home sales tend to lead existing-home sales by roughly one to two months and are a good indicator of market conditions.
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