November Pending Home Sales Slip, Remain on Pace for Best Sales Since 2006

The National Association of Realtors (NAR) Wednesday morning released its data on pending sales of existing homes for November. The pending home sales index slipped by 1% to 106.9 from an upwardly revised October reading of 107.9. The index has fallen for the prior three consecutive months. The November reading is up 2.7% year over year.

The consensus estimate called for a month-over-month increase of 0.5% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

The index has been above 100 (the “average” reading) for 14 straight months.

The NAR’s chief economist noted:

Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains. While feedback from Realtors® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.

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Sales of existing homes are expected to close the year at a pace of around 5.25 million, the highest level since 2006, but still 25% lower than the peak of 7.08 million in 2005. The national median home price is expected to close out 2015 at around $220,700. The NAR plans to release 2015 data on January 12.

By region, November home sales decreased by 3% to an index score of 91.8 in the Northeast and is currently 4.3% higher than in November of 2014. In the South, sales rose 1.3% to an index score of 119.9 and are now 0.5% below the November 2014 index.

Sales dropped by 5.5% in the West to an index score of 100.4, and they are now up 4.5% compared with November 2014. Sales in the Midwest rose 1% to a November index score of 104.9, 4.5% higher than a year ago.