US Pending Home Sales (M/M) Nov: -2.2% (est 0.5%; prev 7.5%) - Pending home sales slip after huge October

 US Pending Home Sales (M/M) Nov: -2.2% (est 0.6%; prev 7.5%)

Pending Home Sales Subside 2.2% in November (nar.realtor)





Pending home sales (which are contract signings not actual transactions so a little more forward looking), which had flipped between big gains and smaller pullbacks the past three months, continued with a -2.2% decline in November following October's huge +7.5% gain.  This was below analysts estimates for a +0.6% gain (although analysts haven't been close the past few months so no surprise there).  This puts them down -2.7% y/y, but that is still a very strong performance given the unusual strength of the market at the end of last year.  They also remain well above pre-pandemic levels, and the full year is on pace for the strongest in at least 15 years.  

As this is contract signings, this will later filter through to existing home sales (normally in around two months).  All regions saw m/m decreases.  

Here is some commentary from the report which focused on tight supplies and high prices describing demand as "unrelenting".

"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability."

Yun notes that housing demand continues to be high, explaining that homes placed on the market for sale go from "listed status" to "under contract" in approximately 18 days.

"Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year," he said. "These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season."

In terms of regions, each of the four major U.S. regions saw contract activity decrease month-over-month.  Year-over-year the Midwest is up marginally the rest of the regions are down.

Month-over-month, the Northeast PHSI declined 0.1% to 99.4 in November, an 8.5% drop from a year ago. In the Midwest, the index fell 6.3% to 116.8 last month, up 0.2% from November 2020.

Pending home sales transactions in the South ticked down 0.7% to an index of 148.2 in November, down 1.3% from November 2020. The index in the West slipped 2.2% in November to 105.5, down 4.6% from a year prior.

To see more content, including summaries of many major U.S. economic reports and my morning and nightly updates go to https://sethiassociates.blogspot.com for the full history.


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