28 January 2013 17:32 [Source: ICIS news]
WASHINGTON (ICIS)--US pending home sales fell by 4.3% in December, the National Association of Realtors (NAR) said on Monday, wiping out the 1.4% gain reported for November and giving further evidence of an uneven recovery in the housing sector.
NAR said that its monthly pending home sales index fell to 101.7 last month, down from the 106.3 reading in November.
However, NAR chief economist Lawrence Yun noted that the monthly index has been running ahead of year-earlier levels for 20 straight months.
December’s index reading of 101.7 is nearly 7% higher than the measure recorded in the same month of 2011.
A residential property sale is listed as “pending” when a contract has been signed but the transaction has not been closed and funded with a mortgage loan. A pending sale usually closes within a month or two of contract signing.
The association's pending sales index is seen as a reliable, forward-looking indicator for near-term expectations in the ?xml:namespace>
The index is measured against the 100 baseline set by the NAR in 2001 to represent an average or healthy pace of pending home sales contracts.
Yun said that home sales are being limited in some parts of the country by short supply of entry-level properties for first-time buyers who typically buy homes in the $100,000 (€74,000) range.
Despite the December downturn, Yun said that the housing recovery continues in what he called “an uneven uptrend”, and he expects the housing market to continue to improve.
“Even with tighter inventory, a pent-up demand and favourable affordability conditions bode well for the market,” Yun said.
He said he expects US existing home sales to show another 9% annual growth this year on top of the 9% gain recorded for 2012.
The US housing industry, especially new home construction, is a crucial downstream consuming sector for a wide range of chemicals, resins and derivative products.
($1 = €0.74)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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