Economy: Pending Home Sales Index for November 2021

The Pending Home Sales Index (PHSI) report for November 2021 was released by The National Association of Realtors® (NAR) this morning:

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Predicted: Unchanged.

Actual: 122.4

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-- Previous Month (revised): 125.2

-- 12 Months Previous: 125.8

Change from Previous Month: -2.236% (-2.8 points)
Change from One Year Previous: -2.703% (-3.4 points)

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From the NAR website:

An index above 100 coincides with a historically high level of home sales activity.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales. 2001 sales are fairly close to the higher level of home sales expected in the coming decade relative to the norms experienced in the mid-1990s. As such, an index of 100 coincides with a historically high level of home sales activity.

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From Today's Report:

"...Pending home sales slipped in November, receding slightly after a previous month of gains, according to the National Association of Realtors®. Each of the four major U.S. regions witnessed contract transactions decline month-over-month. Year-over-year activity mostly retreated too, as three regions reported drops and only the Midwest saw an increase.

The Pending Home Sales Index (PHSI), www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, fell 2.2.% to 122.4 in November. Year-over-year, signings slid 2.7%. An index of 100 is equal to the level of contract activity in 2001.

"There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices," said Lawrence Yun, NAR's chief economist. "While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability."

Yun notes that housing demand continues to be high, explaining that homes placed on the market for sale go from "listed status" to "under contract" in approximately 18 days.

"Buyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year," he said. "These aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season."

Yun adds that a countrywide surge of the omicron variant poses a risk to the housing market's performance, as buyers and sellers are sidelined, and home construction is delayed.

Realtor.com®'s Hottest Housing Markets (link is external) most recent data showed that out of the largest 40 metros, the most improved markets over the past year were Orlando-Kissimmee-Sanford, Fla.; Tampa-St. Petersburg, Fla.; Dallas-Fort Worth-Arlington, Texas; Jacksonville, Fla.; and Denver-Aurora-Lakewood, Colo..."