U.S. pending home sales slid for the third consecutive month in November, dropping 2.6% year-over-year, according to a report from the National Association of Realtors. Year-over-year, contract signings increased by 16.4%.
“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” said Lawrence Yun, NAR’s chief economist. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”
Home prices reached a 14-year high in October, according to CoreLogic’s Case-Shiller index covering home prices. The National Index is now up 24.5% from its former high in July 2006, and was up 8.4% year over year.
As 2021 approaches, Yun predicts that there will be a slight uptick in mortgage rates to around 3%, existing-home sales to increase by roughly 10% and new home sales to increase by 20%.
Now that a second stimulus package has been passed and two vaccines are being administered, Yun said economic growth is guaranteed, but high government borrowing will put modest upward pressure on interest rates.
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Although month-over-month contract activity fell in all four major regions, there were still gains in pending home sales transactions.
“The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun said.
New home sales and existing home sales both also ticked down last month. Sales of newly built homes dipped 11% below October’s revised rate, but was still 21% higher than the same time period last year, according to the Census Bureau. Existing home sales decreased 2.5% in November, ending its five-month streak of month-over-month gains. Compared to last November, home sales were still up 25.8%, NAR said.
Pending home sales fell the most in the West by 4.7%, but still remained 10.4% higher than a year ago. Pending home sales decreased the least in the South, falling 1.1% in November, but were 21.3% higher than last year.
In the Northeast, pending home sales fell 3.3% in November, but is still up 15.3% from last year. The Midwest saw about the same, as its index fell 3.1% but is still up 14.1% from last year.
Justin Malonson is the Founder of LyfeLoop a 16+ year tech innovator, investigative media researcher and host of the Freedom Not Control Podcast live on Voice America. Justin is a highly sought-after tech entrepreneur, industry speaker and winner of the coveted Business Achievement Awards “Top Digital Marketer” award. With 16+ years of demanding experience, Justin has worked with over 3,000 businesses including amazing clients such as Blue Cross Blue Shield Association, Sotheby’s International Realty, Duke University, White House Black Market,Tiffin Motorhomes, Bass Pro Shops and Beazer Homes USA.