Home-Contract Signings Inch Up in November as Tight Supply Chokes Off Sales
Home-Contract Signings Inch Up in November as Tight Supply Chokes Off Sales
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The numbers: Pending home sales ticked up 0.2% in November, the National Association of Realtors said Wednesday.
What happened: NAR’s pending-home sales index tracks real estate transactions in which a contract has been signed, but the deal has not yet been closed.
November’s increase missed the consensus forecast of a 0.5% monthly gain from economists surveyed by Econoday. The index reading was 109.5, where 100 is equal to the average level of contract activity during 2001. That’s 0.8% higher than a year ago.
Big picture: The housing market’s biggest headwind is still the extremely lean levels of inventory available for sale. In November, NAR said there were 3.4 months’ worth of homes for sale, the lowest on record back to 1999.
As NAR Chief Economist Lawrence Yun said, “New buyers coming into the market are finding out quickly that their options are limited and competition is robust.”
Yun is forecasting full-year 2017 existing-home sales of 5.54 million, only 1.7% higher than in 2016. And he expects the new tax law to crimp demand for housing next year—perhaps enough to dent prices.
Pending sales were mixed according to region in November: The index for the Northeast rose 4.1% and the index in the Midwest ticked up 0.4%. In the South, sales dipped 0.4% for the month, while the index covering the West slid 1.8%.
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