U.S. pending home sales post surprise drop as market struggles
Economists consider pending-home sales a leading indicator because they track contract signings
Contract signings to purchase previously owned U.S. homes unexpectedly fell for a second month in November, offering yet another sign that the housing market is struggling.
The index of pending home sales decreased by 0.7%, according to data released by the National Association of Realtors (NAR). The gauge slumped 7.7% from a year earlier on an unadjusted basis, following a downwardly revised 4.7% drop in October.
Related: Smart home telematics and the opportunity for insurers
Regional differences
Pending home sales fell in the Midwest and South, which both dropped more than 2% from the prior month, while the Northeast and West saw increases. While the report doesn’t signal a dramatic collapse in housing, the recovery may have trouble gaining traction. Previously released NAR data showed purchases of previously owned houses roses for a second straight month and exceeded forecasts in November.
The latest report on new home sales from the Census Bureau and Department of Housing and Urban Development showed a slump in October to the weakest pace since March 2016. The November report that had been scheduled for release has been postponed because of the U.S. government shutdown and hasn’t been rescheduled.
Related: U.S. homeownership expected to rise for the young
Key takeaways
The weaker results underscore the challenges as elevated prices and higher mortgage rates keep many Americans on the sidelines of the housing market. Economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when deals close, typically a month or two later.
Related: 5 open house safety tips for homeowners
Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.