Recent data reveals that pending home sales in the United States have surpassed expectations, achieving the highest level recorded since February 2023. The National Association of Realtors (NAR) reported that the forward-looking indicator, based on contract signings, increased by 2.2% month over month in November, reaching a notable index reading of 79.
This marks the fourth consecutive monthly increase in pending sales, demonstrating resilience in the housing market despite ongoing challenges. Analysts had anticipated a more modest rise of 0.8% in the NAR's pending home sales index, but the actual figures showcase a stronger recovery than projected.
Regional performance varied, with sequential growth observed in the Midwest, South, and West, while the Northeast experienced a slight decline of 1.3%. Year-on-year data indicates that the pending home sales index climbed by 6.9%, but this figure fell short of the anticipated growth rate of 7.9%. NAR Chief Economist Lawrence Yun pointed out that consumers seem to have adjusted their expectations regarding mortgage rates, actively capitalizing on a more abundant inventory in the market.
Yun noted that mortgage rates have consistently averaged above 6% for the past two years, influencing buyer dynamics. Potential buyers appear to have shifted their perspective, no longer waiting for a significant drop in mortgage rates and positioning themselves better to negotiate, as the market transitions away from being solely favorable to sellers.
Earlier reports from the NAR indicated a surprising increase in existing home sales for November, marking the most substantial year-over-year growth since June 2021. At the close of last month, available housing inventory totaled 1.33 million units, representing a 2.9% decrease compared to October; however, this figure is up approximately 18% from the same period last year.
The ongoing trends in pending home sales and inventory dynamics offer valuable insights for both buyers and sellers navigating the evolving real estate landscape..