Pending home sales rose 2.2% in November, marking the peak The fourth consecutive month of growth and the highest level since February 2023, according to a report released Monday by the National Association of REALTORS® (NAR).
The Midwest, South and West saw increases in transactions compared to the previous month, while the Northeast declined. Year-over-year, signings increased in all four U.S. regions, with the West leading the way.
Year-over-year, outstanding transactions increased by 6.9%.
“Consumers appear to have recalibrated their expectations for mortgage rates and are taking advantage of the larger inventory available,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged over 6% over the last 24 months. Buyers are no longer waiting for or expecting mortgage rates to drop significantly.”
Industry experts shared Yun's thoughts about buyers adjusting their expectations for mortgage rates.
“In November, mortgage rates stubbornly remained around 6.8%, but were still lower than last year at this point. As a result, there was more buyer activity compared to last year,” said Lisa Sturtevant, chief economist for Bright MLS.
She added that economic uncertainty could have an impact on the real estate market.
“Although some potential homebuyers are fatigued by higher interest rates and still limited inventory, growing pent-up demand in the market will likely be released in the first quarter of 2025 as interest rates begin to fall and inventory levels increase,” Sturtevant said. “Economic uncertainty threatens a strong real estate market in the first quarter. If inflation continues to rise or the labor market weakens, optimism for a housing market recovery in 2025 could be short-lived.”
Buyers are benefiting from a less competitive market, said Hannah Jones, senior economic research analyst at Realtor.com®.
“Mortgage rates were hovering in the high 6% range through November, their highest level since the summer. However, inventory levels outweighed mortgage rates as late fall buyers benefited from a slower, less competitive market,” Jones said. “Although interest rates remain challenging across the market, the seasonal decline in house prices and the weaker market mean more buyers are willing to come off the sidelines.”
PHS regional breakdown
Pending home sales in the Northeast fell 1.3% month-over-month, up 5.6% from November 2023. In the Midwest, the index rose 0.4%, up 1.6% from November 2023 Previous year. The South rose 5.2%, 8.5% more than in November 2023, while the index in the West rose 0.5%, 11.8% more than last year.
“It appears that some markets will outperform, primarily driven by local employment gains and inflows of new inventory,” Yun said.
For the full report, Click here.