Bloomberg News reports that the US pending home sales dropped suddenly in November since higher prices and low inventory limited home buying. The National Association of Realtors’ index related to pending home sales fell 2.2% from one month earlier to 122.4, as per data published Wednesday, as per estimates in a Bloomberg Survey.
The figures obtained imply that the housing market is easing out while approaching the year-end, which has been kept afloat by the lower borrowing costs and strong demand. However, despite the scenario, low and limited inventory and higher prices are weighing on related activities of pending home sales.
According to the chief economist of NAR, Lawrence Yun, in a statement revealed that pending home sales was less this time around, which can be attributed to lower supply in housing and simultaneously to the hesitant nature of the buyers and their approach towards home prices.
The signing of contracts was seen to retreat in all the four regions compared to the earlier months. The Midwest posted the largest drop, which recorded a decline of 6.3%, which happens to be the highest since February.
Compared to one year earlier, contract signings declined by 2.7% on an unadjusted basis.
An independent report last week indicated that the sale of homes that were previously owned increased for a fourth consecutive month since November. The data relating to pending home sales is a strong indicator since they are under contract at least a month or two before getting sold.
Compared to existing home sales computed on the closure of a contract, the pending home sales index indicates contract signings.
