Pending home sales continue to seesaw, receding slightly in November after increasing in October, according to the National Association of Realtors (NAR). The Pending Home Sales Index (PHSI) fell 2.2% to 122.4 in November. An index of 100 is equal to the level of contract activity in 2001. On a year-over-year basis, signings decreased 2.7%.
“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” says NAR chief economist Lawrence Yun. “While I expect neither a price reduction nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.”
Housing demand continues to be high, according to Yun, with homes placed on the market for sale going from “listed status” to “under contract” in approximately 18 days. In addition to buyer competition, home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages in 2021. Yun says those aspects, combined with “exorbitant prices and a lack of available homes,” have created a tougher buying season. The surge of the omicron variant of COVID-19 also poses a risk to the housing market’s performance, with home construction delayed and buyers and sellers sidelined, according to Yun.
Each of the four major U.S. regions witnessed contract transaction decline month over month, and year-over-year activity decreased in every region except the Midwest.
The Northeast PHSI declined 0.1% month over month to 99.4, an 8.5% decrease on a year-over-year basis. In the Midwest, the index decreased 6.3% to 116.8 in November, a 0.2% increase from November 2020. Pending home sales transactions decreased 0.7% month over month to 148.2 in the South, a 1.3% year-over-year decline. The PHSI in the West fell 2.2% in November to 105.5, down 4.6% from the previous year.
The NAR said of the largest 40 metros, the most improved markets over the past year were Orlando-Kissimmee-Sanford, Florida; Tampa-St. Petersburg, Florida; Dallas-Fort Worth-Arlington, Texas; Jacksonville, Florida; and Denver-Aurora-Lakewood, Colorado.
