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\u201cDiminished housing supply offered consumers very few options,\u201d says NAR\u2019s chief economist. He predicts a 2.8% sales decline by the end of 2022.<\/span><\/span><\/p>\n<\/div>\n WASHINGTON \u2013 Pending home sales fell in December for two straight months of declines, according to the National Association of Realtors\u00ae\u2019 (NAR) monthly report. All four major U.S. regions that make up the full report posted month-over-month and year-over-year drops in contract activity.<\/span><\/span><\/p>\n The Pending Home Sales Index (PHSI) \u2013 a forward-looking indicator of home sales based on contract signings \u2013 fell 3.8% to 117.7 in December. Year-over-year, transactions decreased 6.9%. An index of 100 is equal to the level of contract activity in 2001.<\/span><\/span><\/p>\n \u201cPending home sales faded toward the end of 2021, as a diminished housing supply offered consumers very few options,\u201d says Lawrence Yun, NAR\u2019s chief economist. \u201cMortgage rates have climbed steadily the last several weeks, which unfortunately will ultimately push aside marginal buyers.\u201d<\/span><\/span><\/p>\n Even with December\u2019s slowdown in transactions, Yun says 2021 was an overall great period for housing in terms of sales and price appreciation.<\/span><\/span><\/p>\n Yun\u2019s forecast calls for the 30-year fixed mortgage rate to jump to 3.9% by the fourth quarter, and existing-home sales will dip by 2.8% to 5.95 million units.<\/span><\/span><\/p>\n December marks the third straight month of increased new-home construction, and Yun expects housing inventory to keep improving and contribute to slower home price growth in 2022. He forecasts housing starts to rise to 1.65 million units and home prices to increase 5.1%.<\/span><\/span><\/p>\n \u201cThe combination of a more measured demand and rising supply will bring housing prices better in line with wage growth,\u201d Yun says.<\/span><\/span><\/p>\n December pending home sales regional breakdown<\/strong>: Month-over-month, the Northeast PHSI fell 1.2% to 98.2 in December, a 10.5% decline from a year ago. In the Midwest, the index dropped 3.7% to 112.8 last month, down 1.2% from December 2020.<\/span><\/span><\/p>\n\n