Pending U.S. home sales slipped last month as prices remained high and supply continued to dry out.
Home contract signings fell in November after rising in the previous month, according to the latest report from the National Association of Realtors.
The organization’s pending home sales index, which looks at contracts signed for single-family homes, condominiums and co-ops, fell 2.2 percent from October, which had seen a 7.5 percent jump from the month before. The year-over-year drop in November was 2.7 percent.
The month-over-month decline was seen in every region of the U.S. The Midwest had the biggest decrease, with contracts falling 6.3 percent from October. Still, the region was the only one where more deals were signed than were inked a year ago, although the increase was just 0.2 percent.
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Slowdown in pending homes sales signals “turning point” for housing market
The dip can be attributed in part to low housing supply and hesitation surrounding home prices, said NAR chief economist Lawrence Yun. Delays caused by the omicron variant could stall the market as buyers and sellers become sidelined and construction is delayed, Yun added. More than 19 percent of New Yorkers’ Covid tests Tuesday came back positive.
Additional listings figure to take pressure off buyers next year, the economist noted.
“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 said.
Despite the drop in contracts, demand for homes remained high. These days, it takes roughly 18 days for homes to go into contract after being listed, Yun said.
“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,” Yun said.