US pending-home sales jump to highest level since early 2023

[ATLANTA] Pending sales of US existing homes climbed by more than expected in November as a modest improvement in prices and mortgage rates encouraged buyers.

An index of contract signings rose 3.3 per cent to 79.2 last month, the highest level since February 2023, according to figures released on Monday (Dec 29) by the National Association of Realtors (NAR). The gain was broad-based across regions and exceeded all but one estimate in a Bloomberg survey of economists.

“Homebuyer momentum is building,” NAR chief economist Lawrence Yun said in a statement, citing improving affordability and more inventory choices compared to last year. Signings have now increased for four straight months, matching a streak seen during the frenzied housing market of the pandemic.

The recent data point to the gradual improvement many economists see for the housing market into 2026. Mortgage rates that were close to 7 per cent in May have since settled in the 6.3 to 6.4 per cent range, and home prices are growing at a much slower rate compared to last year.

That’s helped fuel small gains in contract closings in recent months. However, economists and industry experts have widely different expectations for next year. In a recent survey of nine market analysts, estimates for the home resale market ranged from 1.7 to 14 per cent sales growth, with the rosiest projection coming from NAR’s Yun.

The trade association’s report on Monday showed contract signings rose in each US region last month to their highest levels of the year. The West posted the largest increase, followed by the South, the nation’s largest home-selling region.

SEE ALSO

US economy to ride tax cut tailwind

Pending-home 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. BLOOMBERG