Pending home sales stabilized in November with a slight gain, according to the National Association of Realtors (NAR) as monthly increases in the South and West offset declines in the Northeast and Midwest. The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, inched up 0.2 percent to 101.7 in November from a downwardly revised 101.5 in October, but is 1.6 percent below November 2012 when it was 103.3. The data reflect contracts but not closings.
“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” said Lawrence Yun, NAR chief economist. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.”
Yun said the market still favors buyers in most of the country, but higher mortgage interest rates in combination with strong price gains mean a more modest growth in values is expected in 2014.
The PHSI in the Northeast declined 2.7 percent to 82.6 in November, but is 1.9 percent above a year ago. In the Midwest the index fell 3.1 percent to 100.6 in November, but is 0.4 percent higher than November 2012. Pending home sales in the South rose 2.3 percent to an index of 116.1 in November, and are 0.1 percent above a year ago. The index in the West increased 1.8 percent in November to 95.0, but is 8.7 percent below November 2012, in part from inventory constraints.
Total existing-home sales this year are expected to reach 5.1 million, a gain of almost 10 percent over 2012, but should stay at that level in 2014, and then rise to 5.3 million in 2015. The national median existing-home price for all of this year will be close to $197,300, up nearly 12 percent from 2012, but is projected to rise at a more moderate pace of 5 to 5.5 percent in 2014, and grow another four percent in 2015.