NAR released a summary of pending home sales data showing that December’s pending home sales pace was down 2.2 percent last month and fell 9.8 percent from a year ago.
Pending sales represent homes that have a signed contract to purchase on them but have yet to close. They tend to lead existing-home sales data by 1 to 2 months.
All four regions showed declines from a year ago. The South had the biggest drop in sales of 13.5 percent. The West fell 10.8 percent followed by the Midwest with a decline of 7.2 percent. The Northeast had the smallest dip in sales of 2.5 percent.
From last month, three of the four regions showed declines in contract signings. The South region had the biggest drop of 5.0 percent. The Northeast fell 2.0 percent followed by the Midwest with a dip of 0.6 percent. The only region with an incline in contract signings was the West, which had a gain of 1.7 percent.
The U.S. pending home sales index level for the month was 99.0. November’s data was revised up to 101.2.
December’s decline was the pending index’s first drop below the 100 mark after 55 consecutive months over the 100 level.
The 100 level is based on a 2001 benchmark and is consistent with a healthy market and existing home sales above the 5 million mark.
The REALTORS® Confidence Index (RCI) survey gathers monthly information from REALTORS® about local real estate market conditions, characteristics of buyers and sellers, and issues affecting homeownership and real estate transactions. This report presents key results about market transactions from December 2018. View and download the full report here.
Market Conditions and Expectations
The REALTORS® Buyer Traffic Index registered at 48 (66 in December 2017).
The REALTORS® Seller Traffic Index registered at 39 (47 in December 2017).
The REALTORS® Confidence Index—Six–Month Outlook Current Conditions registered at 59 for detached single-family, 48 for townhome, and 46 for condominium properties. An index above 50 indicates market conditions are expected to improve.
Properties were typically on the market for 46 days (40 days in December 2017).
Seventy-five percent of respondents reported that home prices remained constant or rose in December 2018 compared to levels one year ago (90 percent in December 2017).
Characteristics of Buyers and Sellers
First-time buyers accounted for 32 percent of sales (32 percent in December 2017).
Vacation and investment buyers comprised 13 percent of sales (16 percent in December 2017).
Sales of distressed properties (foreclosed or sold as a short sale) accounted for two percent of sales (five percent in December 2017).
Cash sales made up 22 percent of sales (20 percent in December 2017).
Twenty-two percent of sellers offered incentives such as paying for closing costs (10 percent), providing warranty (9 percent), and undertaking remodeling (3 percent).
Issues Affecting Buyers and Sellers
From October–December 2018, 75 percent of contracts settled on time (71 percent in December 2017).
Among sales that closed in December 2018, 74 percent had contract contingencies. The most common contingencies pertained to home inspection (54 percent), obtaining financing (45 percent), and getting an acceptable appraisal (42 percent).
REALTORS® report “interest rate” and “low inventory” as the major issues affecting transactions in December 2018.
About the RCI Survey
The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month.
The December 2018 survey was sent to 50,000 REALTORS® who were selected from NAR’s more than 1.3 million members through simple random sampling and to 9,600 respondents in the previous three surveys who provided their email addresses.
There were 5,886 respondents to the online survey which ran from January 2-11, 2019. The survey’s overall margin of error at the 95 percent confidence level is one percent. The margins of error for subgroups and sample proportions of below or above 50 percent are larger.
NAR weighs the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership.
The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org
 Thanks to George Ratiu, Managing Director, Housing and Commercial Research and Gay Cororaton, Research Economist for their data analysis and comments to the RCI Report.
 Respondents report on the most recent characteristics of their most recent sale for the month.
 An index greater than 50 means more respondents reported conditions as “strong” compared to one year ago than “weak.” An index of 50 indicates a balance of respondents
who viewed conditions as “strong” or “weak.”
 The difference in the sum of percentages to the total percentage of sellers who offered incentives is due to rounding.
NAR released a summary of existing-home sales data showing that housing market activity this December, fell after two straight months of gains and was down 6.4 percent from November. Sales of existing-homes dropped 10.3 percent from December 2017. December’s existing-home sales reached a 4.99 million seasonally adjusted annual rate.
The national median existing-home price for all housing types was $253,600 in December, up 2.9 percent from a year ago. This marks the 82nd consecutive month of year-over-year gains.
Regionally, three of the four regions showed growth in prices from a year ago, with the Midwest remaining flat. The Northeast had largest gain of 8.2 percent followed by the South with a gain of 2.5 percent. The West had a modest gain of 0.2 percent from December 2017.
December’s inventory figures are down from last month 10.9 percent to 1.55 million homes for sale. Compared with December of 2017, there was a 6.2 percent increase in inventory levels. It will take 3.7 months to move the current level of inventory at the current sales pace. It takes approximately 46 days for a home to go from listing to a contract in the current housing market, up from 40 days a year ago.
From November 2018, the Midwest experienced the largest decline in sales of 11.2 percent. The Northeast had a decline of 6.8 percent followed by the South with a dip of 5.4 percent. The West had the smallest decline of 1.9 percent.
All four regions showed declines in sales from a year ago. The West had the biggest drop in sales of 15.0 percent. The Midwest had a decline of 10.5 percent followed by the South with a drop of 8.7 percent. The Northeast had the smallest drop in sales of 6.8 percent. The South led all regions in percentage of national sales, accounting for 41.9 percent of the total, while the Northeast had the smallest share at 13.8 percent.
In December, single-family sales were down 5.5 percent and condominiums sales were down 12.9 percent compared to last month. Single-family home sales fell 10.1 percent and condominium sales were down 11.5 compared to a year ago. Single-family homes had an increase in price up 2.9 percent at $255,200 and condominiums rose 2.3 percent at $240,600 from December 2017.
At the national level, housing affordability is down from last month and down from a year ago. Mortgage rates rose to 4.99 percent this November, up 19.1 percent compared to 4.19 percent a year ago.
Housing affordability declined from a year ago in November moving the index down 10.6 percent from 161.0 to 144.0. The median sales price for a single family home sold in November in the US was $260,500 up 5.0 percent from a year ago.
Nationally, mortgage rates were up 80 basis point from one year ago (one percentage point equals 100 basis points).
The payment as a percentage of income was up from last month at 17.4 percent this November and up from 15.5 percent from a year ago. Regionally, the West has the highest payment at 23.8 percent of income. The Northeast had the second highest payment at 17.1 percent followed by the South at 16.8 percent. The Midwest had the lowest payment as a percentage of income at 13.7 percent.
Regionally, the Northeast recorded the biggest increase in home prices at 8.2 percent. The South had an increase of 3.8 percent while the West had a gain of 2.4 percent. The Midwest had the smallest growth in price of 1.6 percent.
Regionally, all four regions saw a decline in affordability from a year ago. The Northeast had the biggest drop in affordability of 14.4 percent. The South had a decline of 9.3 percent followed by the Midwest that fell 9.2 percent. The West had the smallest drop of 7.2 percent.
On a monthly basis, affordability is down from last month in all of the four regions. The Northeast region had the decline of 5.5 percent. The South had a decline of 2.0 percent followed by the Midwest with a dip of 1.8 percent. The West had the smallest dip in affordability of 0.7 percent.
Despite month-to-month changes, the most affordable region was the Midwest, with an index value of 181.9. The least affordable region remained the West where the index was 105.0. For comparison, the index was 148.8 in the South, and 146.4 in the Northeast.
Mortgage applications are currently up while credit availability is down. Rates are higher this month but are still historically low. Home prices are up 5.0 percent while median family incomes that are growing 3.0 percent. The job market is steady. More inventory is welcome on the lower end of the market whereas there is more supply of inventory for high priced homes.
What does housing affordability look like in your market? View the full data release here.
The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation here.
In 1981 when NAR first started tracking the data, the average age of a first-time homebuyer was 29. They made up 44 percent of all homebuyers. Sixty-eight percent of first-time buyers were married couples, 12 percent were single female and 13 percent were single male (seven percent were other).
In contrast, in 2018, the average age of a first-time homebuyer was 46 and they accounted for 33 percent of all homebuyers. Fifty-four percent were married couples, 18 percent were single female, 10 percent were single male, and 16 percent were unmarried couples (two percent were other).
In 1989, first-time buyers largely rented an apartment before they bought their home at 80 percent, and 15 percent lived with parents, relatives, or friends. In 2018, the share of first-time buyers that lived in an apartment before they bought their home slipped to 71 percent while the share of those that had been living with parents, relatives, or friends previous to buying rose to 23 percent.
In a monthly survey of REALTORS®, respondents reported that properties were typically on the market for 42 days (36 days in October 2018; 40 days in November 2017), according to the November 2018 REALTORS® Confidence Index Survey. Properties are staying longer on the market due to slower demand with mortgage rates rising and with new home construction steadily, though modestly, rising.
During September–November 2018, properties typically stayed on the market for 31 to 45 days in California, Oregon, Arizona and Texas, a slower pace compared to less than one month in previous months (Map 1). However, properties continue to sell in less than 31 days in the District of Columbia (28 days) and in 16 states such as Washington (28 days), Nevada (28 days), Utah (23 days), Colorado (26 days), and Massachusetts (27 days).
Properties typically stayed longer on the market in September-November 2018 compared to the same period in 2017 (blue areas) in the District of Columbia and in 22 states such as California, Washington, Oregon, Nevada, Colorado, Massachusetts, and Texas (Map 2).
Properties are staying longer on the market due to the combination of lower demand and the steady increase in new home construction. In states such as California, Oregon, Colorado, Texas, Virginia, North Carolina, and South Carolina, the number of building permits increased during November 2017-October 2018 compared to the prior 12-month period (Map 3).  In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.