CHICAGO, Jan. 31 (Xinhua) -- U.S. pending home sales rose slightly in December for the third consecutive months, the National Association of Realtors (NAR) reported on Wednesday.
The pending home sales index, a forward-looking indicator based on contract signings, rose 0.5 percent to 110.1 in December, the highest reading since last March, the NAR said.
Lawrence Yun, NAR chief economist attributed higher pending home sales to economic prosperity. "Jobs are plentiful, wages are finally climbing and the prospect of higher mortgage rates are perhaps encouraging more aspiring buyers to begin their search now." he said.
While continued supply and demand gaps put upward pressure on house prices, overall price growth are expected to shrink, because of the negative effect the changes to the mortgage interest deduction and state and local deductions under the new tax law, according to Yun.
"In the short term, the larger paychecks most households will see from the tax cuts may give prospective buyers the ability to save for a larger down payment this year, and the healthy labor economy and job market will continue to boost demand," he said.
Yun estimated that existing-home sales, which account for about 90 percent of U.S. home sales, would rise to around 5.54 million units this year, 0.5 percent higher than last year's 5.51 million.
