Pending home sales in the US reached their highest level in 21 months in November, Reuters writes
(Reuters) – Contracts to buy U.S. pre-owned homes rose more than expected in November, rising for a fourth straight month as buyers focused on taking advantage of improved inventory despite stubbornly high mortgage rates.
The National Association of Realtors (NAR) said Monday that its Pending Home Sales Index, based on signed contracts, rose 2.2% last month to 79.0 — the highest since February 2023 — from 77.3 in October. Economists polled by Reuters had expected contracts, which become sales after a month or two, to rise 0.9% after a 1.8% increase in October.
Pending home sales increased by 6.9% compared to a year earlier. On a regional basis, the Midwest, South and West saw monthly increases while contract signings in the Northeast declined. All four regions recorded annual growth.
The increase in contract signings in November was tied to a second consecutive increase in existing home purchases last month, as previously reported by NAR. That earlier report showed that the inventory of homes for sale in November rose nearly 18% from a year earlier.
“Consumers appear to have recalibrated mortgage rate expectations and are taking advantage of more available inventory,” said Lawrence Yun, NAR’s chief economist. “Mortgage rates have averaged above 6% over the past 24 months. Buyers are no longer waiting or expecting mortgage rates to drop significantly. Furthermore, buyers are in a better position to negotiate as the market moves away from a seller’s market.”
Indeed, the rate on popular 30-year fixed-rate mortgages has risen over the past two months to its highest level since July at 6.85%, according to Freddie Mac (OTC:), essentially countering the interest rate cuts brought in by the Federal Reserve since September.
The 10-year U.S. Treasury note, which has the biggest impact on setting rates on most home loans, has risen about one percentage point since September. That came as bond market investors grew concerned that policies favored by President-elect Donald Trump — such as tariffs, tax cuts and a crackdown on immigration — could lead to higher inflation.
