The National Association of Realtors announced that its Pending Home Sales Index (PHSI) rose 1.2% in November 2019, reaching 108.5 (An index of 100 is equal to the level of contract activity in 2001). Year-over-year contract signings increased by 7.4% during November.
Across the nation, various regions experienced different rates of growth. Specifically, the Western part of the United States experienced the most impressive rate of growth, followed by the remaining trio of major regions, which only experienced slight differences in month-over-month contract activity. However, each of these regions’ pending home sales did experience an uptick.
Pending home sales in the West grew 5.5% in the month are 14% higher than November 2018. The Midwest’s pending home sales rose slightly at 1%—5% more than last year. Both the Northeast and South regions posted declines for the month at 0.1% and 0.2%, respectively.
“Despite the insufficient level of inventory, pending home contracts still increased in November,” said Lawrence Yun, NAR Chief Economist. “The favorable conditions are expected throughout 2020 as well, but supply is not yet meeting the healthy demand.”
Yun’s quote is highlighting the information gleaned from the recent NAR Real Estate Forecast Summit, wherein the agreed-upon prediction for 2020 by the majority was a 2% growth, a 3.7% unemployment rate, and a 3.8% average mortgage rate. As for home prices, the agreed-upon consensus was that they would increase by 3.6% during 2020, following the impressive 5% increase experienced this past year in 2019.
“Sale prices continue to rise, but I am hopeful that we will see price appreciation slow in 2020.” Yun said. “Builder confidence levels are high, so we just need housing supply to match and more home construction to take place in the coming year.”
The Federal Housing Finance Agency announced home prices rose 0.2% in October from the prior month and were 5% year-over-year.
Two of the nine regions studied by the FHFA reported declines in home prices over the month—West North Central (-0.2%) and East North Central (-0.5%).