The National Association of Realtors (NAR) Wednesday morning released its data on pending sales of existing homes for November. The pending home sales index slipped 2.7 points (down 2.5%) to 107.3 from an unrevised October reading of 110. The November reading is down 0.4%.
November sales in three of four NAR regions sent the index tumbling to its second-lowest reading of the year, behind the January index of 105.4.
The consensus estimate called for a month-over-month increase of 0.5% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.
The index has been above 100 (the “average” reading) for 27 straight months.
The NAR’s chief economist noted:
The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election. Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract. … Healthy local job markets amidst tight supply means many areas will remain competitive with prices on the rise. Those rushing to lock in a rate before they advance even higher will probably have few listings to choose from. Some buyers will have to expand the area of their home search or be forced to delay in order to save a little more money for their down payment.
2016 existing-homes sales are now forecast close the year at around 5.42 million, the highest annual pace since 2006 (6.48 million). In 2017, existing-home sales are currently forecast to rise about 2% to around 5.52 million. The national median home price is forecast to rise about 5% in 2016 and another 4% in 2017.
By region, November pending home sales increased by 0.6% to an index score of 97.5 in the Northeast, up 5.7% compared with November 2015. In the South, sales slipped 1.2% to an index score of 118.7, 1.3% lower than last year’s index.
Sales rose by 6.7% in the West to an index score of 101, down 1% year over year for the month, and sales in the Midwest fell by 2.5% to a November index score of 103.5, now 2.4% lower than November 2015.