(Reuters) – Contracts to purchase U.S. previously owned homes rose greater than expected in November, notching a fourth straight month of gains as buyers focused on benefiting from improved inventory despite stubbornly high mortgage rates.
The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on signed contracts, rose 2.2% last month to 79.0 – the very best since February 2023 – from 77.3 in October. Economists polled by Reuters had forecast contracts, which change into sales after a month or two, would rise 0.9% after increasing 1.8% in October.
Pending home sales rose 6.9% from a 12 months earlier. On a regional basis, the Midwest, South and West saw monthly increases while contract signings slipped within the Northeast. All 4 regions posted annual gains.
The rise in contract signings in November dovetailed with a second straight rise in existing home purchase completions last month reported previously by NAR. That earlier report showed the inventory of homes on the market in November was up by nearly 18% from a 12 months earlier.
“Consumers appeared to have recalibrated expectations regarding mortgage rates and are benefiting from more available inventory,” said Lawrence Yun, the NAR’s chief economist. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are not any longer waiting for or expecting mortgage rates to fall substantially. Moreover, buyers are in a greater position to barter because the market shifts away from a seller’s market.”
Indeed, the speed on popular 30-year-fixed-rate mortgages has climbed up to now two months to the very best since July at 6.85%, in keeping with Freddie Mac, essentially counter-acting the rate of interest cuts delivered since September by the Federal Reserve.
The ten-year U.S. Treasury note, which is the highest influence in determining rates on most home loans, has climbed by roughly a percentage point since September. That has occurred as bond market investors have grown concerned about how policies favored by President-elect Donald Trump – reminiscent of tariffs, tax cuts and immigration crackdowns – might feed into higher inflation.
(Reporting By Dan Burns; Editing by Chizu Nomiyama)