After four months of upward momentum, pending home sales fell in December, closing out the year on a disappointing note. Mortgage rates, meanwhile, held steady.
The increases in pending sales throughout the fall pointed to a possible housing market rebound in 2025, and agents were starting to express more optimism about their sales prospects in the year ahead.
But much like existing home sales, which ended 2024 at the lowest level since 1995, pending sales appeared to peter out last month, falling 5.5% from November and 5% year-over-year, according to the latest data from the National Association of Realtors — “adding uncertainty to the outlook for the early 2025 housing market,” said Bright MLS Chief Economist Lisa Sturtevant.
Lawrence Yun, NAR’s chief economist, acknowledged that “one step back is not welcome news,” but also noted that “economic data never moves in a straight line.”
Mortgage rates flat, but increases ‘may be over’
The 30-year fixed-rated mortgage averaged 6.95% this week, according to Freddie Mac — just a hair below last week’s 6.96%.
It’s the second week of declines, but it may not be enough to entice buyers, Sturtevant said. “The latest news on mortgage rates suggests that a busy winter home shopping season is less likely than we might have thought as we headed into the new year.”
The good news, however, is that the Fed’s Jan. 29 decision to pause rate cuts elicited little reaction from financial markets, suggesting that “investors appear to be pricing in a more predictable rate environment,” said Samir Dedhia, CEO of One Real Mortgage.
“I anticipate less turbulence than previously expected,” Dedhia said, though he noted that some volatility related to Trump administration policies is likely. “The fact that rates did not increase week-over-week is a strong sign that the increases in rates may be over, but we’re still in a wait and watch approach for Q1.”
Read the complete news on the source website - Real Estate News
Author: Amie Fisher
