Pending home sales slump
New contract signings fall again with inventory at an all-time low
Wall Street private equity firms buying up starter homes
FOX Business Gerri Willis reports from Westchester County, New York, on housing prices rising at the fastest rate in 34 years.
Pending home sales fell for the third month in a row in January, amid all-time low inventory and sky-high prices.
A sold sign is posted in front of a home sale in San Francisco, California. (Photo by Justin Sullivan/Getty Images) (Photo by Justin Sullivan/Getty Images / Getty Images)
The latest data from the National Association of Realtors shows contract signings for home sales dropped 5.7% last month, when the number of available homes on the market hit a record low of 860,000 units.
"With inventory at an all-time low, buyers are still having a difficult time finding a home," said NAR chief economist Lawrence Yun.
HOUSING, INFLATION, SUPPLY CHAIN CREATE BUILDERS' PERFECT STORM
The Pending Home Sales Index showed a decline in sales across three of the four major regions in the U.S. according to the NAR, with sales in the West actually seeing a boost last month.
A "Sold" sign outside a new home under construction in Tucson, Arizona, U.S., on Tuesday, Feb. 22, 2022. (Photographer: Rebecca Noble/Bloomberg via Getty Images) (Photographer: Rebecca Noble/Bloomberg via Getty Images / Getty Images)
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DHI | D.R. HORTON INC. | 163.70 | +0.57 | +0.35% |
| TOL | TOLL BROTHERS INC. | 152.98 | +1.02 | +0.67% |
| LEN | LENNAR CORP. | 169.00 | +0.72 | +0.43% |
Pending home sales dropped by 12.1% in the Northeast in January, 6.3% in the South and 5.9% in the Midwest. The West saw contracts increase by 1.5%. Year over year, total sales fell by 9.5%, with all regions posting declines.
HOME PRICES SURGED NEARLY 19% LAST YEAR, MARKING HIGHEST READ EVER
"Given the situation in the market – mortgages, home costs and inventory – it would not be surprising to see a retreat in housing demand," Yun added.
Mortgage interest rates have been on a steady climb, with the average 30-year fixed-rate product hitting 4.06% this week – nearly a full percentage point higher than where it sat a year ago according to the Mortgage Bankers Association.
A "Sold" sign stands outside a home following a snow fall in Geneseo, Illinois, U.S., on Monday, Jan. 20, 2020. (Photographer: Daniel Acker/Bloomberg via Getty Images) (Photographer: Daniel Acker/Bloomberg via Getty Images / Getty Images)
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The MBA's latest numbers indicate a 13.1% drop in mortgage applications from a week ago, while the average loan size has hovered around $453,000.