Sun State Savings

After 3 con­sec­u­tive months of growth, the hous­ing mar­ket appears to have eased a bit in December.

Accord­ing to the National Asso­ci­a­tion of REALTORS®, December’s Pend­ing Home Sales Index slipped 4 per­cent from the month prior. The index mea­sures the num­ber of homes under con­tract to sell nation­wide, but not yet sold.

Despite falling below its bench­mark “100 value”, December’s Pend­ing Home Sales Index is the reading’s second-highest value since April 2010 — the last month of last year’s home buyer tax credit program.

In other words, the hous­ing mar­ket con­tin­ues to show signs of improve­ment, pro­pelled by low home prices and the cheap­est mort­gage rates of all-time.

Fred­die Mac’s mort­gage rate sur­vey put the 30-year fixed rate mort­gage at an aver­age of 3.96% in Decem­ber — a 75-basis point improve­ment from Decem­ber 2010. This helps to make homes more afford­able nationwide.

On a regional basis, December’s Pend­ing Home Sales Index varied :

• North­east Region: –3.1 per­cent from Novem­ber 2011
• Mid­west Region : +4.0 per­cent from November 2011 
• South Region : –2.6 per­cent from November 2011
• West Region : –11.0 per­cent from November 2011

But even regional data is only so help­ful. Like every­thing in real estate, data must be local to be relevant.

Through­out the West Region, for exam­ple, the U.S. region in which pend­ing home sales fell the most, sev­eral states must have per­formed bet­ter than the regional aver­age. And, undoubt­edly, there were cities, towns, and neigh­bor­hoods that expe­ri­enced marked mar­ket growth.

Unfor­tu­nately, the Pend­ing Home Sales Index can’t cap­ture that data. Nor can it iden­tify the mar­kets in which home sales suffered.

For today’s home buy­ers and sell­ers, there­fore, it’s impor­tant to under­stand your local mar­ket and the dri­vers of local activ­ity. Reports like the Pend­ing Home Sales Index can paint a broad pic­ture U.S. hous­ing but for data that mat­ters to you, you’ll want to look local.

For local real estate data, talk to an expe­ri­enced real estate professional.

Tags: NAR, Pending Home Sales Index, PHSI

This entry was posted on Friday, January 27th, 2012 at 6:45 am and is filed under Housing Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.