November Pending Home Sales Drop 2.2%

Pending home sales slipped in November, as every region saw monthly declines, the National Association of Realtors reported Wednesday.

The Pending Home Sales Index,, a forward-looking indicator of home sales based on contract signings, fell by 2.2.% to 122.4 in November. Year-over-year, signings slid by 2.7%.

All four regions saw monthly declines. In the Northeast, pending sales fell by 0.1% to 99.4 in November and fell by 8.5% from a year ago. In the Midwest, the index fell by 6.3% to 116.8 in November but improved by 0.2% from a year ago.

Pending home sales transactions in the South fell by 0.7% to 148.2 in November and fell by 1.3% from a year ago. In the West, pending sales slipped by 2.2% in November to 105.5 and fell by 4.6% from a year ago.

“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR chief economist. “Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year. These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.”

Odeta Kushi, Deputy Chief Economist with First American Financial Corp., Santa Ana, Calif., noted pending home sales nearly 13% higher than two years ago. “Demand remains strong, but limited inventory may be holding back sales activity,” she said. Nationally, the housing market remains a competitive sellers’ market. Demand for homes is high, but you can’t buy what’s not for sale.”

Kushi also noted 2021 “has been a very strong year for the housing market. The housing market enters 2022 with robust demand but near record-low inventory, which means house price growth will remain elevated.”