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46 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Pending Home Sales Increase, Breaking a Six-Month Downturn "This recent low point in home sales activity is likely over," said Lawrence Yun, NAR's Chief Economist. "Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market." A ccording to the Pend- ing Home Sales Index (PHSI) released by the National Association of Realtors, pending home sales increased 2.5% nationally, breaking a six-month streak of worsening numbers that began in May 2022. The index now stands at 76.9 points as of December 2022. Year over year, pending transactions dropped by 33.8%. An index num- ber of 100 was benchmarked to home sales when the report was created in 2001. "This recent low point in home sales activity is likely over," said Lawrence Yun, NAR's Chief Economist. "Mortgage rates are the dominant factor driving home sales and recent declines in rates are clearly helping to stabilize the market." Of the four major geographical regions of the country, the West reported the largest growth of the group at 6.4% in December to an index of 58.6 but overall decreased by 37.5% year over year. The South saw the second highest growth at 6.1% to an index of 94.1 but dropped year over year 34.5%. However, the PHSI dropped in the other two regions of the country. In the Northeast, the PHSI dropped 6.5% from December to an index of 64.7%, a decline of 32.5% over December 2021. The Midwest index shrank by the least—or 0.3%—to an index of 77.6, a decline of 30.1% year over year. "The new normal for mortgage rates will likely be in the 5.5% to 6.5% range," Yun added. "Job gains will steadily become important in driving local home-sales markets. The South, in particular, is set to outperform the rest of the coun- try, thanks primarily to better job market conditions in this part of the country compared to other regions." The PHSI is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when