Surge in Pending Home Sales Reflects Improved Housing Affordability
National Association of Realtors (NAR) reported that pending home sales, or contracts to purchase previously owned homes, surged unexpectedly in November to their highest level in almost three years. This increase was driven by improved housing affordability, attracting more buyers to the market.
Key Figures and Trends
- Pending home sales increased by 3.3% in November, following a revised upward gain of 2.4% in October.
- Economists surveyed by Reuters had forecasted a 1.0% rise in contracts, which typically turn into sales within one to two months.
- Year-over-year, pending home sales rose by 2.6%.
- The sales-tracking index reached its highest level since February 2023.
Expert Commentary and Context
Lawrence Yun, Chief Economist of the NAR, stated: “Home buying is gaining momentum. The data shows the best annual performance considering seasonal factors and the best in nearly three years since February 2023.”
Yun further explained, “The improvement in housing affordability, driven by lower mortgage rates and faster wage growth than rising home prices, is helping buyers explore the market.”
The increase in contracts was observed across four regions: Northeast, Midwest, South, and West.
Key Questions and Answers
- Q: What recent development has been observed in the US housing market? A: Pending home sales have reached their highest level in almost three years, with a 3.3% increase in November.
- Q: What factors have contributed to this surge in pending home sales? A: Improved housing affordability, driven by lower mortgage rates and faster wage growth compared to rising home prices, has attracted more buyers.
- Q: How do these recent figures compare to economists’ predictions? A: Economists surveyed by Reuters had forecasted a 1.0% rise in contracts, but the actual increase was 3.3%.
- Q: In which regions have pending home sales seen the most significant growth? A: Contracts increased across the Northeast, Midwest, South, and West.
Additional Context
The National Association of Realtors (NAR) is a trade organization representing more than 1.5 million members involved in real estate across the United States. As a leading voice in shaping policies and practices for today’s real estate professionals, the NAR provides valuable insights into housing market trends and economic factors affecting both buyers and sellers.
Lawrence Yun, as the Chief Economist of NAR, plays a crucial role in analyzing housing market data and providing expert commentary on trends, affordability, and economic factors influencing the real estate sector.
