Pending home sales slightly rose again in November, rising over year-over-year levels for the third straight month, according to the National Association of REALTORS®’ The Pending Home Sales Index. All major regions except for the Midwest experienced a slight gain in activity in November.
The Pending Home Sales Index increased 0.8 percent to 104.8 in November from a slightly downwardly revised 104.0 in October and is now 4.1 percent above November 2013 (100.7) – the highest year-over-year gain since August 2013 (5.6 percent).
Lawrence Yun, NAR chief economist, says signed contracts inched forward in November and have been fairly stable but haven’t broken out even as the economy picked up steam this spring. “The consistent economic growth and steady hiring we’ve seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year’s end,” he said. “With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months.”
Yun also notes that falling gas prices will likely boost consumer confidence and allow prospective buyers the opportunity to save additional money for a downpayment. NAR’s 2014 Profile of Home Buyers and Sellers (released in November) found that the median downpayment ranged from 6 percent for first-time buyers to 13 percent for repeat buyers.
“There’s still misperception out there that a much higher downpayment is needed, while that’s not the reality,” adds Yun.
The PHSI in the Northeast rose 1.4 percent to 89.1 in November, and is now 7.0 percent above a year ago. In the Midwest the index decreased 0.4 percent to 100.0 in November, and is now 0.5 percent below November 2013.
Pending home sales in the South rose 1.3 percent to an index of 119.7 in November, and are 5.1 percent above last November. The index in the West increased 0.4 percent in November to 98.5, and is now 4.9 percent above a year ago.
Total existing-homes sales this year are expected to be around 4.94 million, a decline of 3.0 percent from last year (5.09 million), but are then forecasted to rise to 5.30 million in 2015. The national median existing-home price for all of this year will be close to $208,000, up 5.6 percent from 2013, and is likely to moderate to a pace between 4 and 5 percent next year. Existing-home prices rose 11.4 percent in 2013.
For more information, visit www.realtor.org.