- Thomas Costerg, a senior U.S. economist at Standard Chartered Bank
Contracts to buy previously owned homes in the US dropped in November for the third time in four months, suggesting growth in the housing market may be cooling. According to the National Association of Realtors, pending home sales index fell 0.9% to 106.9, compared with a 0.5% gain expected by economists. In October, pending home sales in climbed 0.4%, revised from a previously reported gain of 0.2%. In annual terms, pending home sales increased at an annual 5.1% rate in November, surpassing expectations for a 4.0% rise and following a gain of 2.3% in the preceding month. Pending home contracts become sales after a month or two, and the decreases in recent months could indicate slower growth in homebuying in 2016, when interest rates are predicted to climb. Mortgage rates have only inched higher since the Fed hiked the benchmark rate by a quarter point on December 16, but policy makers expect to continue raising rates next year.
Furthermore, the NAR reported earlier this month that its more closely watched index, final sales of existing homes plunged 10.5% in November to an annual rate of 4.76 million, the lowest level in 19 months. The NAR pointed to delays triggered by new federal rules, coupled with a tight supply of for-sale homes, as the primary reasons.
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