The National Association of REALTORS announced today that, despite a drop in the pending home sales last month, the number of home sales under contract have improved year over year.
The Pending Home Sales Index (PHSI) was 101.7 in December 2012, which is 4.3% lower than what it was in November 2012, according to the NAR. Despite this setback, NAR says last month’s number was 6.9% higher than it was 12 months prior, making it the 20th consecutive month of year-over-year gains.
The lower number of pending home sales can be attributed to the shrinking inventory of existing homes on the market. Completed sales of previously occupied houses dropped in December, compared to the previous month because the number of homes for sale fell to its lowest level in eleven years.
Prospective homebuyers were also hard-pressed to find affordable houses on the market. According to the NAR, the supply of homes going for less than $100,000 in the West was very tight.
NAR says this is a sign that the housing market is making a recovery. Last year, home sales were at a five-year high. Further, the organization predicts that the number of transactions completed this year will be up 9%.