Pending home sales rose 2.2% in November, marking the fourth consecutive month of increases and the highest level since February 2023, according to a National Association of REALTORS® (NAR) report released Monday.
The Midwest, South and West experienced month-over-month gains in transactions, while the Northeast decreased. Year-over-year, contract signings increased in all four U.S. regions, with the West in the lead.
Year-over-year, pending transactions increased 6.9%.
“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially.”
Industry experts echoed Yun’s thoughts on buyers adjusting their expectations on mortgage rates.
“In November, mortgage rates remained stubbornly around 6.8%, but they were still lower than they were last year at this time. As a result, there was more buyer activity compared to a year ago,” said Bright MLS Chief Economist Lisa Sturtevant.
She added that the economic uncertainty could have an effect on the housing market.
“Although some prospective homebuyers are fatigued by higher rates and still-limited inventory, growing pent-up demand in the market will likely be unleashed during the first quarter of 2025 as rates begin to fall and inventory increases,” said Sturtevant. “Economic uncertainty does put at risk a strong first quarter housing market. If inflation continues to rise, or if the labor market softens, optimism for a rebounding 2025 housing market could be short-lived.”
Buyers are taking advantage of a less-competitive market, said Realtor.com® Senior Economic Research Analyst Hannah Jones.
“Mortgage rates hovered in the high-6% range through November, their highest level since the summer. However, inventory levels out-weighed mortgage rates as late-fall buyers took advantage of a slower, less competitive market,” Jones said. “Though interest rates remain a challenge across the market, the seasonal slide in home prices and slower market mean more buyers are willing to come off the sidelines.”
PHS regional breakdown
Pending home sales in the Northeast fell 1.3% from last month, up 5.6% from November 2023. In the Midwest, the index rose 0.4%, up 1.6% from a year ago. The South increased 5.2%, up 8.5% from November 2023, while the index went up 0.5% in the West, up 11.8% from the prior year.
“It appears that some markets will outperform, driven primarily by local job gains and the flow of new inventory supply,” Yun said.
For the full report, click here.
