Pending home sales dropped 2.6 percent in November, the third consecutive month during the pandemic that activity dropped off in the real estate market, according to the Pending Home Sales Index (PHSI).
The index, calculated monthly by the National Association of Realtors (NAR), showed that month-over-month sales activity dropped in all four major regions of the country (Northeast, Midwest, South and West). But compared to 2019, pending home sales are actually up in all regions.
“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” Lawrence Yun, NAR’s chief economist, said in a press release about the index. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”
Yun forecasted in the release that the 2021 housing market will overall be positive, with existing home sales anticipated to rise about 10 percent, and new home sales up 20 percent. Mortgage rates are expected to go up slightly from the current rate of 2.7 percent to roughly 3 percent.
“The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun said in the release, adding that between the new relief package and the expanding rollout of vaccinations, “economic growth is guaranteed.”
NAR is the biggest trade association in the country, with over 1.4 million members working in residential and commercial real estate.
Last month’s index dropped 1.1 percent, PYMNTS reported, but overall, since the pandemic took hold in March, the digital real estate market has soared. NAR said the residential real estate sector for the U.S. had increased by almost 9 percent in July.