According to the National Association of Realtors’ (NAR) Pending Home Sales Index (PHS), signed contracts for existing homes rose 0.5% nationwide over the month of December 2017. According to the NAR, the PHS, a leading indicator of housing activity, measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index generally leads Existing-Home Sales by a month or two.
The rate of change over the month varied in regions across the country. The nationwide growth in the PHS reflected both a 2.6 percent increase in the South and a 1.5 percent rise in the West. However, gains in these parts of the country were partially offset by declines in the Northeast, 5.1 percent, and the Midwest, 0.3 percent.
Sales of existing homes may be constrained by low inventory. At the same time, the NAR notes in its release that existing-home sales and price growth are forecast to moderate in 2018, primarily because of the new tax law’s expected impact in high-cost housing markets.