Pending home sales contracted in November following a mid-season rebound in contract signings the prior month, according to the newest report from the National Association of REALTORS® (NAR).
NAR’s Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, dropped by 2.2% last month, trickling down to 122.4.
All regions saw year-over-year contract signings slip in November last month, declining 2.7% nationally.
The persisting imbalance between housing supply and strong buyer demand remains at the center of the challenges facing the market, including price growth and intense competition. Experts indicate both factors influence would-be buyers.
Recent surges in the COVID-19 omicron variant have also dissuaded people.
Regional Breakdown:
Northeast
-0.1% MoM — Now 99.4 PHSI
-8.5% YoY
Midwest
-6.3% MoM — 116.8 PHSI
-0.2% YoY
South
-0.7% MoM — 148.2 PHSI
-1..3% YoY
West
-2.2% MoM — 105.5 PHSI
-4.6% YoY
What the Industry Is Saying:
“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. While I expect neither a price reduction nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.
“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.”— Lawrence Yun, NAR Chief Economist
“Despite a slip in the November data, contract signings suggest that activity remained brisk with the index notching its third highest level of the year as home sale closings continued at a high level in November. Contract signings or pending home sales were down 2.2% from October, and down 2.7% from one year ago in November. Pendings were down in all four regions from last month, with the biggest drop in the Midwest and a negligible decline in the Northeast. From one year ago, contract signings were lower in three of the four regions, with the Midwest showing a small gain.
“Like new-home sales, which rose in November, pending sales of existing homes measure an earlier stage in the home-buying process and signal what’s ahead for real estate activity. While more holiday gatherings and waning confidence caused a small slip in activity in November, home shoppers remained motivated.
“As we approach the new year, many are looking ahead, especially first-time homebuyers hoping to make a big change in 2022. Real estate demand continues to outmatch supply, and our survey data suggests that first-time shoppers both expect competition and are adjusting their plans to prepare for it further in advance. This makes sense as the early part of the year is recently among the most competitive seasons, with buyers aiming to get a jump-start on new year’s resolutions, while sellers tend to wait until the heart of spring to list homes for sale With our 2022 housing market forecast anticipating fast-growing rents, gradually rising mortgage rates, continued home price gains and an eventual improvement in inventory trends, 2022 holds lots of opportunity for hopeful buyers—and also some cost-advantages for those who can find and close on their home sooner rather than later.”— Danielle Hale, Chief Economist at realtor.com®
For more information, please visit www.nar.realtor.
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news ideas to jgrice@rismedia.com.
