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U.S. Pending Home Sales Unexpectedly Show Another Steep Drop In November
(RTTNews) - A report released by the National Association of Realtors on Wednesday unexpectedly showed a continued slump in U.S. pending home sales in the month of November.
NAR said its pending home sales index tumbled by 4.0 percent to 73.9 in November after plunging by 4.7 percent to a revised 77.0 in October.
The extended nosedive came as a surprise to economists, who had expected pending home sales to increase by 0.6 percent.
Pending home sales slid for the sixth consecutive month and are now down by 37.8 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.
"Pending home sales recorded the second-lowest monthly reading in 20 years as interest rates, which climbed at one of the fastest paces on record this year, drastically cut into the number of contract signings to buy a home," said NAR Chief Economist Lawrence Yun.
"There are approximately two months of lag time between mortgage rates and home sales," he added. "With mortgage rates falling throughout December, home-buying activity should inevitably rebound in the coming months and help economic growth."
The report showed particularly steep drops in pending home sales in the Northeast and Midwest, where pending home sales plummeted by 7.9 percent and 6.6 percent, respectively.
Pending home sales in the South also slumped by 2.3 percent, while pending home sales in the West fell by 0.9 percent.
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