U.S. Pending Home Sales Rebound More Than Expected In November

(RTTNews) - Pending home sales saw a slight improvement in the month of November, according to a report released by the National Association of Realtors on Wednesday, with pending sales rebounding from the drop seen in the previous month.

NAR said its pending home sales index rose 0.8 percent to 104.8 in November after tumbling 1.2 percent to a downwardly revised 104.0 in October. Economists had been expecting the index to increase by about 0.5 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the monthly increase, the pending home sales index is up by 4.1 percent compared to a year ago, reflecting the biggest year-over-year gain since August of 2013.

Lawrence Yun, NAR chief economist, said signed contracts have been fairly stable but haven't broken out even as the economy picked up steam this spring.

"The consistent economic growth and steady hiring we've seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year's end," Yun said.

He added, "With rents now rising at a seven-year high, historically low rates and moderating price growth are likely to entice more buyers to enter the market in upcoming months."

The rebound by pending home sales in November reflected notable increases in the Northeast and South, where pending sales jumped by 1.4 percent and 1.3 percent, respectively.

Pending home sales in the West also increased by 0.4 percent, while pending sales in the Midwest dropped by 0.4 percent.

NAR said existing home sales are expected to total around 4.94 million this year before climbing to 5.30 million in 2015.

The national median existing home price is expected to rise by 5.6 percent in 2014 but moderate to a pace of growth between 4 and 5 percent next year, NAR said.

Last Monday, NAR released a separate report showing that existing home sales pulled back by more than expected in the month of November after reaching their highest level in a year in the previous month.

NAR said existing home sales tumbled 6.1 percent to a seasonally adjusted annual rate of 4.93 million in November after climbing 1.4 percent to 5.25 million in October. Economists had expected existing home sales to edge down to 5.20 million.

With the bigger than expected decrease, existing home sales fell to their lowest annual rate since hitting 4.91 million in May.