The number of houses going under contract in the U.S. fell in November to levels not seen since the onset of the Covid-19 pandemic, highlighting the housing sector downturn as interest rates rise, data from the National Association of Realtors showed Wednesday.
–The Pending Home Sales Index, a leading indicator of home sales based on contract signings, declined 4% to 73.9 in November. This is close to the level seen in April 2020, when the index fell to 70.0.
–Economists polled by The Wall Street Journal expected the index to decline 1.8%.
–Pending home sales fell 37.8% compared with the same month a year earlier.
–“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 Lawrence Yun, NAR’s chief economist. With mortgage rates falling throughout December, home-buying activity should rebound in the coming months, he said.
–Pending home sales dropped in all four major U.S. regions. Contract signings fell the most in the Northeast, by 7.9% on month, followed by a 6.6% decline in the Midwest. Transactions decreased at a lesser pace in the South and the West, by 2.3% and 0.9%, respectively.