TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1334848
44 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA DATA DATA Pending Home Sales Report: Uptick in Contract Signings Here's what economists attribute the increase to, and why they describe the winter housing market as "incredibly swift." P ending home sales saw a month-over-month de- cline during November, according to the data from the National Association of Realtors (NAR). However, sales were up from one year earlier. NAR's Pending Home Sales Index (PHSI) fell 2.6% to 125.7 in November, the third consecutive month of decline. But on a year- over-year measurement, contract signings climbed 16.4%. An index of 100 is equal to the level of contract activity in 2001. On a regional measurement, the Northeast PHSI dropped 3.3% to 108.6 in November, a 15.3% increase from a year ago. In the Midwest, the index was down 3.1% to 115.9, up 14.1% from November 2019. Pending home sales in the South dipped by 1.1% to an index of 150.0 in November, up 21.3% from November 2019, and the index in the West tumbled by 4.7% in November to 111.3, which is up 10.4% from a year ago. "The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices," said Lawrence Yun, NAR's Chief Economist. "It is important to keep in mind that the current sales and prices are far stronger than a year ago. The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buy- ers wanting to take advantage of record-low mortgage rates." Yun predicted a favorable outlook for the housing market in 2021, forecasting a slight upward rise in mortgage rates from the current 2.7% to around 3%, adding existing-home sales should increase roughly 10% and new home sales by 20%. "Economic growth is guaran- teed from the stimulus package and from vaccine distribution, but high government borrowing will put modest upward pressure on interest rates," he added. NAR's data mirrored sta- tistics recently released by the U.S. Census Bureau and the Department of Housing and Urban Development that found sales of new single-family houses in November were at a seasonally adjusted annual rate of 841,000, an 11% decline from October's revised rate of 945,000 but also 20.8% above November 2019 estimate of 696,000. That data report also found the seasonally adjusted esti- mate of new houses for sale at the end of November was 286,000, which represented a 4.1-month supply at the current sales rate, while the median sales price of new houses sold last month was $335,300 and the average sales price was $390,100. "Economic growth is guaranteed from the stimulus package and from vaccine distribu- tion, but high government borrowing will put modest upward pressure on interest rates." —Lawrence Yun, Chief Economist, NAR