Contract signings for home sales picked up slightly in November, turning around as October activity took a downward revision.
The National Association of Realtors (NAR) reported a 0.8 percent month-over-month increase in its Pending Home Sales Index to a reading of 104.8 in November. The index, which tracks contract signings as an indicator of future sales volume, measured 104.0 in October (down slightly from an originally reported 104.1).
With the most recent increase, the index has now posted annual gains for three straight months, lining up with recent improvements in existing-home sales activity.
"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," said NAR Chief Economist Lawrence Yun.
With the cost of renting on the rise and mortgage rates still scraping historically low levels, Yun says he expects homebuyers will become more engaged in the coming months.
On the other hand, despite increasing consumer confidence, sentiment toward the housing market remains tepid as rising home prices present a hurdle for those struggling to meet down payment requirements. In its 2014 profile of homebuyers and sellers, NAR reported that the median down payment ranged from about 6 percent for first-time homebuyers to 13 percent for repeat buyers.
"There's still misperception out there that a much higher downpayment is needed, while that's not the reality," Yun said.
Except for the Midwest, all major regions posted higher pending sales numbers in November, led by a 1.4 percent gain in the Northeast, which reported an index value of 89.1. Pending sales in the South were up 1.3 percent to an index of 119.7, while pending sales in the West were up 0.4 percent to 98.5.
The Midwest's pending sales index slipped 0.4 percent, ending the month at 100.0.
For all of 2014, NAR forecasts existing-home sales will come in around 4.94 million, a drop of 3.0 percent from 2013 thanks to a slow first half of the year. Sales are expected to jump to 5.30 million this year.