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Pending home sales dip slightly, possibly because of low supply of available housing, experts say

Pending Home Sales
Posted at 1:07 PM, Jan 29, 2021
and last updated 2021-01-29 13:07:26-05

Pending home sales slipped slightly in December compared to the month prior, however they are still historically high.

The National Association of Realtors released their report Friday looking at how many Americans signed contracts to buy homes last month.

December pending home sales was down just .3% from November 2020, and was the fourth-straight month of decline after a huge surge in August.

On an index scale, where 100 represents the level of contract activity in 2001, December 2020 was at 125.5, compared to December 2019 which was at 103.4 on the index.

The rate of contract signings is considered an indicator of home sales. The NAR says the recent dip could be due to supply and demand issues.

"Pending home sales contracts have dipped during recent months, but I would attribute that to having too few homes for sale," Lawrence Yun, NAR's chief economist, said in a written statement. "There is a high demand for housing and a great number of would-be buyers, and therefore sales should rise with more new listings."

Yun also said the elevated demand for housing without a significant boost in supply has caused home prices to increase, and he expects prices to rise for the foreseeable future.