Pending Home Sales Fell More Than Expected In November

Pending home sales fell way more than expected in November, according to the latest data from the National Association of Realtors.

  • M-O-M: The Pending Home Sales Index fell 4.0% to 73.9 in November. This was the sixth straight monthly decline but was the smallest drop since August.
  • Y-O-Y: Pending transactions are now down 37.8% when compared to one year ago.

Reminder. An index of 100 is equal to the level of contract activity in 2001.

South Still On Top. The South held on to the top spot despite a 2.3% drop from October to an index of 88.5. The Midwest fell 6.6% to 77.8, the Northeast was down 7.9% to 63.3, and the West reported a drop of 0.9% to an index of 55.1 in November.

  • Year-over-year the West had the worst year with a 45.7% drop followed by the South (-38.5%), the Northeast (-34.9%), and the Midwest (-31.6%).

Analysis. Lawrence Yun, NAR Chief Economist, was blunt but optimistic. “Pending home sales recorded the second-lowest monthly reading in 20 years…The residential investment component of GDP has fallen for six straight quarters,” Yun added. “There are approximately two months of lag time between mortgage rates and home sales. With mortgage rates falling throughout December, home-buying activity should inevitably rebound in the coming months and help economic growth.”