U.S. Home Sales Increase in November

(Reuters) – Contracts to buy U.S. previously owned homes rose more than expected in November, marking a fourth consecutive month of gains. Buyers focused on improved inventory despite high mortgage rates.

The National Association of Realtors (NAR) reported on Monday that its Pending Home Sales Index, based on signed contracts, rose 2.2% last month to 79.0—the highest since February 2023—from 77.3 in October. Economists had anticipated a 0.9% increase after an 1.8% rise in October.

Pending home sales increased 6.9% year-over-year. Regionally, the Midwest, South, and West experienced month-to-month increases, while the Northeast saw a decline. All four regions reported annual gains.

The rise in contract signings aligns with a second consecutive increase in existing home purchase completions reported previously by NAR, which indicated that inventory was up nearly 18% from the previous year.

“Consumers appear to have recalibrated expectations regarding mortgage rates and are taking advantage of the increased inventory,” said Lawrence Yun, NAR’s chief economist. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting or expecting substantial drops in mortgage rates. Moreover, buyers find themselves in a stronger position to negotiate as the market shifts from a seller’s market.”

Indeed, the rate for the popular 30-year fixed-rate mortgages has risen in the last two months to 6.85%, according to Freddie Mac (OTC:FMCC), essentially offsetting the interest rate cuts introduced by the Federal Reserve since September.

Additionally, the 10-year U.S. Treasury note, which heavily influences home loan rates, has increased by about a percentage point since September. This rise is attributed to investor concerns over how policies favored by President-elect Donald Trump—such as tariffs, tax cuts, and immigration crackdowns—could increase inflation.