U.S. Pending Home Sales Inch Up 0.2% In November, Much Less Than Expected

(RTTNews) - Pending home sale in the U.S. showed a slight increase in the month of November, according to a report released by the National Association of Realtors on Monday, although the modest uptick fell well short of economist estimates.

NAR said its pending home sales index inched up 0.2 percent to 101.7 in November after falling 1.2 percent to a downwardly revised 101.5 in October. Economists had been expecting the index to jump by about 1.5 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.

The modest increase by the pending home sales index came on the heels of five consecutive monthly decreases. The index subsequently remains down by 1.6 percent compared to November of 2012.

Lawrence Yun, NAR chief economist, said, "We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014."

"Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years," he added.

The report said monthly increases in pending home sales in the South and West offset declines in the Northeast and Midwest.

Pending home sales in the South and West rose by 2.3 percent and 1.8 percent, respectively, while pending sales in the Northeast and Midwest fell by 2.7 percent and 3.1 percent, respectively.

NAR said existing-home sales are expected to reach 5.1 million in 2013, reflecting a 10 percent increase compared to 2012. Sales are expected to remain at that level in 2014 before rising to 5.3 million in 2015.

The national median existing-home price is expected to jump 12 percent in 2013, although the pace of growth is expected to moderate to 5 to 5.5 percent in 2014.

Earlier this month, NAR released a separate report showing that existing home sales fell by more than expected in the month of November.

NAR said existing home sales dropped 4.3 percent to a seasonally adjusted annual rate of 4.90 million in November after falling 3.2 percent to 5.12 million in October. Economists had expected existing home sales to dip to an annual rate of 5.02 million.

Existing home sales fell for the third consecutive month, dropping to their lowest level since a matching rate in December of 2012.