Despite persistently high mortgage rates, contracts to purchase previously owned homes in the US increased more than anticipated in November, marking a fourth consecutive month of advances as purchasers concentrated on utilizing better inventory.
The Pending Home Sales Index, which is based on signed contracts, increased 2.2% last month to 79.0, the highest since February 2023, from 77.3 in October, according to the National Association of Realtors (NAR) on Monday. After rising 1.8% in October, Reuters questioned economists who predicted contracts—which turn into sales after a month or two—would increase by 0.9%.
Compared to the previous year, pending house sales increased 6.9%. Regionally, contract signings declined in the Northeast while monthly increases occurred in the Midwest, South, and West. Annual improvements were reported for all four regions.
The NAR previously reported a second consecutive increase in existing home purchase completions last month, which coincided with the increase in contract signings in November. According to that earlier estimate, there were about 18% more properties for sale in November than there were a year earlier.
“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” said Lawrence Yun, the NAR’s chief economist. “Mortgage rates have averaged above 6 per cent for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”
In fact, according to Freddie Mac, the rate on common 30-year fixed-rate mortgages has increased over the last two months to 6.85%, the highest level since July, thereby negating the interest rate reductions the Fed has been making since September.
Since September, the 10-year US Treasury note—the primary factor influencing rates on the majority of house loans—has increased by around a percentage point. This has happened as bond market investors have been more worried about how Donald Trump’s preferred policies, such tax cuts, tariffs, and immigration crackdowns, could contribute to increased inflation.
