U.S. Pending Home Sales Pull Back Unexpectedly In November

A report released by the National Association of Realtors on Wednesday showed an unexpected pullback in U.S. pending home sales in the month of November.

NAR said its pending home sales index slid 2.2 percent to 122.4 in November after spiking 7.5 percent to 125.2 in October. The decrease surprised economists, who had expected pending home sales to rise by 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

The unexpected pullback came after the pending home sales index reached its highest level since last December in the previous month.

“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,” said NAR’s chief economist Lawrence Yun.

He added, “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.”

Pending home sales in the Midwest led the way lower in November, plunging by 6.3 percent, while pending home sales in the West also slumped by 2.2 percent.

The report showed pending home sales in the South also fell by 0.7 percent, and pending home sales in the Northeast edged down by 0.1 percent.

“Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year,” Yun said.

He added, “These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.”

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