Pending home sales increased in November, rebounding from the prior month’s decline, according to the National Association of Realtors (NAR). The West region reported the highest growth last month, while the other three major U.S. regions saw only marginal variances in month-over-month contract activity. Pending home sales were up nationally and up in all regions compared to one year ago.
The Pending Home Sales Index (PHSI), rose 1.2 percent to 108.5 in November. Year-over-year contract signings jumped 7.4 percent. An index of 100 is equal to the level of contract activity in 2001.
“Despite the insufficient level of inventory, pending home contracts still increased in November,” said Lawrence Yun, NAR’s chief economist, noting that housing inventory has been in decline for six straight months dating back to June 2019. “The favorable conditions are expected throughout 2020 as well, but supply is not yet meeting the healthy demand.”
At the recent NAR Real Estate Forecast Summit, the consensus forecast called for two percent GDP growth, a 3.7 percent unemployment rate and a 3.8 percent average mortgage rate in 2020. Home prices were projected to rise by 3.6 percent in 2020 after a five percent gain in 2019.
“Sale prices continue to rise, but I am hopeful that we will see price appreciation slow in 2020,” said Yun. “Builder confidence levels are high, so we just need housing supply to match and more home construction to take place in the coming year.”
The regional indices had mixed results in November. The Northeast PHSI slid 0.1 percent to 96.3 in November, 2.6 percent higher than a year ago. In the Midwest, the index rose one percent to 102.5 last month, five percent higher than in November 2018.
Pending home sales in the South decreased 0.2 percent to an index of 125.0 in November, a 7.7 percent increase from last November. The index in the West grew 5.5 percent in November 2019 to 98.4, an increase of 14.0 percent from a year ago.
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