US pending home sales rise 2.5% in December

US pending home sales rose in December for the first time in seven months, according to data released on Friday by the National Association of Realtors.

Pending home sales increased 2.5% on the month, taking the index to 76.9 and beating expectations for a 0.9% decline. Year-on-year, pending home sales fell by 33.8%.

NAR chief economist Lawrence Yun said: "This recent low point in home sales activity is likely over.

"Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market."

The index for the Northeast declined 6.5% on the month in December to 64.7, a 32.5% fall on December 2021. Meanwhile, the Midwest index dipped 0.3% to 77.6 in December on the month and was down 30.1% on the year.

The index for the South rose 6.1% to 94.1, which was a 34.5% year-on-year decline. The index for the West was up 6.4% on the month to 58.6, marking a 37.5% fall on the year.

Yun said: "The new normal for mortgage rates will likely be in the 5.5% to 6.5% range. Job gains will steadily become important in driving local home-sales markets. The South, in particular, is set to outperform the rest of the country, thanks primarily to better job market conditions in this part of the country compared to other regions."