A recent report from the National Association of Realtors, released on Monday, indicates that pending home sales in the United States saw a significant and unexpected increase in November. According to the NAR, the pending home sales index rose by 2.2% to reach 79.0 in November, following a 1.8% rise to 77.3 in October. This surge surpassed economists' forecasts, which anticipated a modest 0.7% increase.
Marking its fourth consecutive monthly gain, the pending home sales index has now reached its highest point since February 2023. Pending home sales refer to contracts signed but not yet finalized, with closings typically occurring within four to six weeks.
Lawrence Yun, the NAR's Chief Economist, commented, "Consumers seem to have adjusted their expectations regarding mortgage rates and are benefiting from the increased availability of inventory." He further noted, "Mortgage rates have remained above 6% for two years. Buyers have stopped expecting or waiting for significant declines in these rates. Additionally, as the market transitions from a seller's market, buyers are in a stronger position to negotiate."
The unexpected surge in pending home sales was notably driven by a significant rise in the South, where sales jumped 5.2%. Meanwhile, the West and Midwest regions showed increases of 0.5% and 0.4%, respectively. However, pending home sales in the Northeast decreased by 1.3%.
Yun elaborated, "Certain markets seem poised to excel, mainly propelled by local job growth and the availability of new inventory."
In a related report released last Monday by the Commerce Department, new home sales demonstrated a notable recovery in November. The report detailed a 5.9% increase, bringing new home sales to an annualized rate of 664,000, rebounding from a significant 14.8% drop to a revised rate of 627,000 in October. Economists had predicted a 6.6% rise to an annual rate of 650,000, based on an originally reported October rate of 610,000.
