US pending home sales advance to highest level since early 2023

PENDING sales of US homes increased for a fourth month in November to the highest level since early 2023 as homebuyers gave up hopes for lower borrowing costs.

A National Association of Realtors (NAR) measure of contract signings rose 2.2 per cent to 79, the highest since February 2023. The median estimate in a Bloomberg survey of economists called for a 0.8 per cent increase.

The report aligns with earlier data showing homebuyers pressed ahead with purchases of existing homes in November despite higher mortgage rates. Pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they are sold.

“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” NAR chief economist Lawrence Yun said. “Buyers are no longer waiting for or expecting mortgage rates to fall substantially.”

Pending sales were led by a 5.2 per cent monthly increase in the south, with smaller advances in the west and midwest. Activity declined in the northeast. Across the US, contract signings climbed 5.6 per cent from a year earlier before adjusting for seasonality.

Housing affordability in the US remains under strain amid high prices and elevated borrowing costs. Federal Reserve officials signalled after their Dec 17 to 18 policy meeting that they anticipate a slower pace of interest-rate reductions in 2025, suggesting little respite for home buyers in the near future.