WASHINGTON (December 28, 2023) – The number of pending home sales in November was the same as the number of sales in October, according to the National Association of REALTORS®. Monthly trading volume increased in the Northeast, Midwest and West, while losses were recorded in the South. All four of his regions in the United States recorded year-over-year volume declines.
The Pending Home Sales Index (PHSI)*, a forward-looking indicator of home sales based on contract closings, remained at 71.6 in November. Year-over-year, pending transactions decreased by 5.2%. An index of 100 corresponds to the level of contract activity in 2001.
NAR Chief Economist Lawrence Yun said, “While fewer homebuyers submitted formal contracts in November due to lower mortgage rates, the increase in lockbox openings and closings shows that “Interest has skyrocketed,” he said.
Regional breakdown of pending home sales
The Northeast PHSI rose 0.8% month-on-month to 64.4, and fell 6.4% from November 2022. The Midwest Index rose 0.5% to 76.2 in November, down 2.2% from a year ago.
The Southern PHSI decreased by 2.3% to 83.2 in November, a decrease of 6.5% from the previous year. The West Index rose 4.2% to 54.0 in November and has fallen 4.9% since November 2022.
“Mortgage rates will fall further in December, leading to savings of about $300 per month compared to recent cyclical rate peaks, and home sales will improve in 2024,” Yun added. .
About the National Association of REALTORS®
The National Association of REALTORS® is the nation's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered association membership mark that identifies real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics.
# # #
*The Home Sales Pending Index is a leading indicator for the housing sector based on pending sales of existing homes. If a contract is signed but the transaction is not completed, the sale will be shown as pending, but the sale typically completes within 1-2 months after signing.
Pending contracts are a good indicator that future sales will be completed. However, the period from pending contract to closing of the sale is not the same for all home sales. The length of the process from pending contract to closing sale can be caused by issues such as buyers' difficulty obtaining mortgage financing, home inspection issues, and appraisal issues.
This index is based on a sample covering approximately 40% of monthly multiple listing service data. In developing the model for this index, we demonstrated that the level of monthly sales contract activity was comparable to the level of existing home sales closed over the following two-month period.
An index of 100 equals the average level of contracting activity in 2001, the first year of the study. Coincidentally, existing home sales in 2001 fell within the range of 5 million to 5.5 million, which is considered normal for the current U.S. population.
Note: December existing home sales will be reported on January 19, 2024. The next Pending Home Sales Index will be released on January 26, 2024. All announcement times are 10am ET. It is displayed. NAR Statistics News Release Schedule.
