After a stronger-than-expected surge through much of the fall, home buyers took a breather in November.
Signed contracts to buy existing homes were basically flat for the month, up just 0.2 percent compared to October, according to a seasonally adjusted monthly index of pending home sales from the National Association of Realtors.
The index was 0.8 percent higher compared to November of 2016, the first annual gain since June of this year. Pending sales are an indicator of future closed sales in the next two months.
Sales of both existing and newly built homes had slowed over the summer but then turned dramatically higher in October and November, surprising the experts who continue to point to the low supply of homes for sale as a drag on the market. Supply weakened further in November, which is likely part of the pull-back.
“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” said Lawrence Yun, chief economist for the NAR.
“However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home,” Yun said.
Home prices continue to show strong gains, accelerating from earlier in the year due to high demand. The supply of homes for sale fell to just 3.4 months’ worth in November, the lowest since the NAR began tracking supply in 1999. That is keeping prices high.
Prices were up 6.2 percent nationally in October, according to the S&P CoreLogic Case Shiller Home Price Index. That was an acceleration from September. Higher prices are hurting demand. A demand index from Redfin, a real estate brokerage, fell in November, after rising through much of the early fall. The index measures requests for home tours, offers and signed contracts.