When pending home sales jumped 7.5 percent in October rather than the fractional increase expected, Lawrence Yun, chief economist for the National Association of Realtors® (NAR) viewed the change as defensive. Fast-rising rents and an anticipated increase in interest rates were pushing potential buyers in a position to do so to sign contracts to purchase a home sooner rather than later, he said. The pending home sales report for November appears to validate his position. Signed contracts to purchase pre-owned single-family homes, townhouses, condos, and cooperative apartments fell back 2.2 percent compared to October and were down 2.7 percent from November 2020. NAR’s Pending Home Sales Index (PHSI) fell from 125.2 to 122.4. Pending sales are considered a leading indicator of existing home sales over the following one to two months. [pendinghomesdata] Yun said, “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. 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.” Yun notes that housing demand continues to be high, explaining that homes placed on the market for sale go from “listed status” to “under contract” in approximately 18 days. Analysts had expected a second month of increases in the PHSI. Those polled by Econoday forecasted an increase of 0.6 percent while Trading Economics posted a consensus estimate for a half-point gain.
Source: Mortgage News Daily
