Housing contract activity picked up in November as buyers shrugged off high mortgage rates and benefited from higher inventory levels.
The pending home sales index, which tracks contract signings on existing homes, rose 2.2% from October to 79, its highest reading since February 2023, according to the National Association of Realtors ( NAR). An index level of 100 is equivalent to contracting activity in 2001.
This is the fourth consecutive month of gains. Pending home sales are up 6.9% compared to November 2023.
“Consumers appear to have recalibrated their expectations for mortgage rates and are taking advantage of more available inventory,” Lawrence Yun, NAR’s chief economist, said in a statement.
Last month, housing contract activity increased in every region of the country except the Northeast. The South saw the largest month-over-month increase, improving 5.2% from October and 8.5% from last year.
All regions of the country saw an increase in contracting activity compared to November 2023, led by an 11.8% increase in the West.
Learn more: Real estate market 2025: is it a good time to buy a house?
Even if the market recovers, 2024 is on track to be one of the slowest years for existing home sales in decades. High prices, coupled with high mortgage rates, have kept many potential buyers and sellers away.
Still, after two years of mortgage rates above 6%, Yun said buyers may be adjusting.
“Buyers are no longer expecting or expecting a substantial drop in mortgage rates,” the release said. “Plus, buyers are in a better position to negotiate as the market moves away from a sellers’ market.”
The NAR expects 4.5 million existing home sales next year. In November, existing home sales were at a seasonally adjusted annual rate of 4.15 million.
Homes typically go under contract one to two months before the sale is finalized, meaning pending home sales are a leading indicator of real estate market activity.
Claire Boston is a senior reporter for Yahoo Finance, covering housing, mortgages and home insurance.
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