Pending home sales declined by 5.5% in December compared to the previous month, following four consecutive months of gains, according to the National Association of Realtors This Week in Real Estate. Meanwhile, the Census Bureau and the Department of Housing and Urban Development reported a healthy annual increase in new home sales. Single-family new home sales rose by 3.6% in December from the previous month and increased by 6.7% compared to the same period last year. For the calendar year, new home sales were 2.5% higher than the 2023 total, marking the highest level since 2021. In a widely anticipated move, the Federal Reserve unanimously voted to maintain the benchmark federal funds interest rate, pausing after three consecutive cuts totaling one percentage point. Two days later, the personal consumption expenditure (PCE) price index, the Federal Reserve’s preferred inflation measure, indicated a slight acceleration in price increases for December, aligning with expectations. The Commerce Department reported that the index rose by 2.6% year-over-year in December and by 0.2% from November, with inflation ending the year firmly above the Federal Reserve’s 2% target. Despite various news events that could impact the bond market and mortgage interest rates, it was a relatively calm week. The 30-year fixed-rate mortgage averaged 6.95%, slightly down from the previous week’s average of 6.96%, according to Freddie Mac. Below are key events from the fourth week of January impacting our business: LIMITED EXISTING INVENTORY PROVIDES A BOOST FOR NEW HOME SALES. A limited amount of existing inventory along with solid demand helped new home sales end the year on an up note. Sales of newly built, single-family homes in December increased 3.6% to a 698,000 seasonally adjusted annual rate. The pace of new home sales in December was up 6.7% compared to a year earlier. New single-family home inventory in December continued to rise to a level of 494,000, up 10% compared to a year earlier. NAHB estimates the combined new and existing total months’ supply (8.5 months’ supply for new homes while the much larger resale market was at 3.1) fell to just a 4 months’ supply in December, the lowest since April 2024. “New home sales ended the year 2.5% higher over the 2023 total,” said NAHB Chief Economist Robert Dietz. “NAHB is forecasting a slight gain for sales in 2025 given ongoing solid macroeconomic conditions, particularly for the labor market.” Read the full story here.PENDING HOME SALES FELL 5.5% IN DECEMBER. Pending home sales retracted 5.5% in December – following four consecutive months of increases – according to the National Association of REALTORS®. The Pending Home Sales Index (PHSI) slid 5.5% to 74.2 in December. Year-over-year, pending transactions declined 5.0%. The Northeast PHSI fell 8.1% from last month to 62.3, down 1.3% from December 2023. The Midwest index shrunk 4.9% to 74.3 in December, down 6.9% from the previous year. The South PHSI slipped 2.7% to 90.6 in December, down 5.1% from a year ago. The West index tumbled by 10.3% from the prior month to 57.7, down 5.1% from December 2023. Read the full story hereHOME EQUITY HOLDS STEADY DURING FOURTH QUARTER. ATTOM released its fourth quarter 2024 U.S. Home Equity Report Thursday, which shows that 47.7 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values. That level was down slightly from 48.3 percent in the third quarter of 2024 and from a recent peak of 49.2 in the prior three-month period. However, it was still up from 46.1 percent in the fourth quarter of 2023 and remained at historically high levels that again showed one of the most profound benefits of the nation’s 13-year housing market boom. The portion of mortgaged homes that were equity-rich during the fourth quarter of 2024, 47.7 percent, remained far above the 26.5 percent level recorded in early 2020. Read the full story here.
Take advantage of superior service and the convenience of one-stop shopping for the best loan and insurance coverage to fit your needs. Home warranty coverage is available through America’s #1 home warranty company, American Home Shield.
