Reflecting a shortage of inventory and fast-rising home prices, the National Association of Realtors released a report on Wednesday showing a continued decrease in U.S. pending home sales in the month of November.
NAR said its pending home sales index slid 2.6 percent to 125.7 in November after falling by 0.9 percent to 129.1 in October. Economists had expected pending home sales to come in unchanged.
Pending home sales declined for the third straight month but were still up by 16.4 percent compared to the same month a year ago.
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.
“It is important to keep in mind that the current sales and prices are far stronger than a year ago,” said NAR chief economist Lawrence Yun.
He added, “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 offered a favorable outlook for the housing market in 2021, forecasting a 10 percent jump in existing home sales and a 20 percent spike in new home sales.
The continued pullback in pending home sales in November reflected decreases in all four regions of the country, with pending sales in the West plunging by 4.7 percent.
Pending home sales in the Northeast and Midwest also tumbled by 3.3 percent and 3.1 percent, respectively, while pending sales in the South fell by 1.1 percent.