American home buying hits record high for the month of December

Americans last month signed contracts to purchase homes at a record high for the month of December, according to The Associated Press.

Though the total number of Americans who bought homes has dipped slightly in the last four months, the National Association of Realtors’ (NAR) index of pending home sales rating of 125.5 in December marks an all-time high for the month. The level of contract activity was at an index of 100 in 2001, and last month’s numbers indicate a 21.4 percent increase from December 2019, the AP reported.

“There is a high demand for housing and a great number of would-be buyers, and therefore sales should rise with more new listings,” Lawrence Yun, the NAR’s chief economist, said in a news release. “This elevated demand without a significant boost in supply has caused home prices to increase and we can expect further upward pressure on prices for the foreseeable future.”

The index uses the number of contract signings as a gauge for how many homes will be purchased over the next one to two months.

Contract signings remained virtually flat in the West and South and declined by 3.6 percent in the Midwest. The Northeast saw a slight increase in signings at 3.1 percent, according to the NAR.

The housing market has been able to sustain itself even in midst of a decline brought on by the ongoing coronavirus pandemic. Low interest rates have attracted prospective buyers, though prices for homes have risen recently and housing supply is at an all-time low, AP reported.