U.S. Pending Home Sales Surge To Highest Level Since February 2023

(RTTNews) - A report released by the National Association of Realtors on Monday showed pending home sales in the U.S. surged by much more than expected in the month of November.

NAR said its pending home sales index shot up by 2.2 percent to 79.0 in November after jumping by 1.8 percent to 77.3 in October. Economists had expected pending home sales to climb by 0.7 percent.

The pending home sales index increased for the fourth consecutive month, reaching its highest level since February 2023.

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.

"Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory," said NAR Chief Economist Lawrence Yun.

"Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially," he added. "Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller's market."

The bigger than expected increase by pending home sales partly reflected a spike in the South, where pending home sales soared by 5.2 percent.

Pending home sales in the West and Midwest also rose by 0.5 percent and 0.4 percent, respectively, while pending home sales in the Northeast slumped by 1.3 percent.

"It appears that some markets will outperform, driven primarily by local job gains and the flow of new inventory supply," explained Yun.

Last Monday, the Commerce Department released a separate report showing a significant rebound by new home sales in the month of November.

The Commerce Department said new home sales surged by 5.9 percent to an annual rate of 664,000 in November after plunging by 14.8 percent to a revised rate of 627,000 in October.

Economists had expected new home sales to spike by 6.6 percent to an annual rate of 650,000 compared to the rate of 610,000 originally reported for the previous month.