U.S. pending home sales, which track signed contracts for existing homes, fell by 9.3% month-over-month in December amid elevated mortgage rates, low inventory, and high median home prices. As of January 15, the average rate on a 30-year mortgage was 6.06%, according to Freddie Mac (FMCC).
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“Consumers prefer seeing abundant inventory before making the major decision of purchasing a home,” said National Association of Realtors Chief Economist Lawrence Yun. “So, the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale.”
Trump Moves to Curb Institutional Home Purchases
President Trump believes that housing inventory could increase with fewer institutional homebuyers. On Tuesday, he signed an executive order banning large institutional investors from purchasing single-family homes.
As part of the order, the Secretary of the Treasury will define the terms “large institutional investor” and “single-family homes” within 30 days. Within 60 days, federal agencies will provide guidance to implement the order. The White House added that the new policy will prioritize families over big Wall Street players and that “People live in homes, not corporations.”