The National Association of Realtors (NAR) released their pending home sales report for November. What it shows is that pending home sales rebounded from the decrease in October. Regionally, home sales were divided as our area showed pending home sales down 0.1%. Pending home sales is listed as such when the contract has been signed but the transaction has not closed. The sale usually is finalized within one or two months of signing.
The NAR’s Pending Home Sales Index (PHSI) , which is a forward indicator based on contract signings rose 1.2% nationally to 108.5. It is noted that year over year signings are up 7.4% from a year ago. An index number of 100 is what activity was in 2001.
Lawrence Yun, chief economist for the NAR states “Despite the insufficient level of inventory, pending home contracts still increased in November. The favorable conditions are expected throughout 2020 as well, but supply is not yet meeting the healthy demand.” A NAR forecast suggests that home prices will rise 3.6% in 2020 after it increased 5% in 2019. Yun continues to implore more construction to meet demand saying “Sale prices continue to rise, but I am hopeful that we will see price appreciation slow in 2020. Builder confidence levels are high, so we just need housing supply to match and more home construction to take place in the coming year.”
As stated above, regionally the results are mixed. Here is a breakdown per region:
Northeast: PHSI decreased 0.1% to 96.3 in November. This is 2.6% higher from the same time in 2019.
South: There was a decrease of 0.2% in November of the PHSI. The index is at 125.0 in November which is a 7.7% increase from last November.
West: The West saw a growth of 5.5% in November 2019 to 98.4. There was a significant increase year to year of 14.0% from a year ago.
Midwest: The Midwest Midwest saw an increase of PHSI of 1.0% to 102.5. Year to year this was an overall increase of 5.0% higher than in November 2018.
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