November Pending Home Sales Slide 2.6%

Ongoing inventory shortages and rising home prices pushed pending home sales down for the third straight month, the National Association of Realtors reported last week.

NAR said month-over-month contract activity fell in November in each of the four major U.S. regions. However, from a year ago, all four areas achieved gains in pending home sales transactions.

The Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, fell by 2.6% to 125.7 in November. Year-over-year, contract signings jumped by 16.4%.

In the Northeast, the index slid by 3.3% to 108.6 in November but improved by 15.3% from a year ago. In the Midwest, the index fell by 3.1% to 115.9 in November but improved by 14.1% from a year ago.

Pending home sales in the South decreased by 1.1% to 150.0 in November but rose by 21.3% from a year ago. The index in the West fell by 4.7% in November to 111.3, but improved by 10.4% from a year ago.

“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” said NAR Chief Economist Lawrence Yun. “It is important to keep in mind that the current sales and prices are far stronger than a year ago. The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates.”