The National Association of Realtors® (NAR) reported on Wednesday (12-29-21) their Pending Homes Sales Index (PHSI), which is based on signed real estate contracts, not actual closings, for existing single-family homes, condominiums, and co-ops, declined -2.2% in November from October 2021, to a reading of 122.4. An index of 100 is equal to the level of contract activity in 2001. Year-over-year contract signings have also declined -2.7%. Contract activity declined in each of the four major U.S. regions month-over-month. Year-over-year three regions reported a modest drop-in activity, with only the Midwest posting an increase.
In a statement prepared for the November PHSI, Lawrence Yun, NAR’s chief economist said, “There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices. While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.”
Yun notes that housing demand continues to be high, explaining that homes placed on the market for sale go from “listed status” to “under contract” in approximately 18 days.
Yun continued, “Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year. These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.”
Yun adds that a countrywide surge of the omicron variant poses a risk to the housing market’s performance, as buyers and sellers are sidelined, and home construction is delayed.
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Pending Home Sales Subside 2.2% in November