Pending home sales were mostly unmoved in November, but did squeak out a minor gain both on a monthly and annualized basis, according to the National Association of Realtors. Existing home sales and price growth are forecast to slow, primarily because of the altered tax benefits of homeownership affecting some high-cost areas.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 0.2 percent to 109.5 in November from 109.3 in October. With the modest increase, the index remains at its highest reading since June (110.0), and is now 0.8 percent above a year ago.
Lawrence Yun, NAR chief economist, says contract signings mustered a small gain in November and were up annually for the first time since June. “The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” he said. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”
One of the biggest questions heading into 2018, according to Mr. Yun, is if the depressed levels of available supply can improve enough to slow price growth and make buying a home more affordable.
Mr. Yun forecasts for existing-home sales to finish 2017 at around 5.54 million, which is an increase of 1.7 percent from 2016 (5.45 million). The national median existing-home price for 2017 is expected to increase around 6 percent. In 2018,
The PHSI in the Northeast jumped 4.1 percent to 98.9 in November, and is now 1.1 percent above a year ago. In the Midwest the index rose 0.4 percent to 105.8 in November, and is now 0.8 percent higher than November 2016.
Pending home sales in the South decreased 0.4 percent to an index of 123.1 in November but are still 2.5 percent higher than last November. The index in the West declined 1.8 percent in November to 100.4, and is now 2.3 percent below a year ago.
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