Pending home sales hold steady in November

Pending home sales in November were flat, the National Association of Realtors (NAR) reported this morning.

The latest Pending Home Sales Index (PHSI) held steady at 71.6 in November compared to 71.4 in October. Year-over-year sales were down 5.2%, however. 

The PHSI is a forward-looking indicator of home sales based on contract signings. An index of 100 is equal to the level of contract activity in 2001.

“Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,” said Lawrence Yun, NAR chief economist.

Here’s how sales break down by region:

• The Northeast PHSI rose 0.8% from last month to 64.4, a drop of 6.4% from November 2022. 
• The Midwest index increased 0.5% to 76.2 in November, down 2.2% from one year ago.
• The South PHSI declined 2.3% to 83.2 in November, decreasing 6.5% from the prior year.
• The West index climbed 4.2% in November to 54.0, falling 4.9% from November 2022.

“With mortgage rates falling further in December – leading to savings of around $300 per month from the recent cyclical peak in rates – home sales will improve in 2024,” Yun added.

The NAR recently provided its home sales projections for 2024 and expects existing-home sales to increase by more than 13%.

Earlier this week, the U.S. Census Bureau and the Department of Housing and Urban Development reported sales of new single‐family houses in November declined 12.2% to a seasonally adjusted annual rate of 590,000 compared to the revised October rate of 672,000.