In November, pending home sales stabilized with a slight gain, and monthly increases in the South and West offset declines in the Northeast and Midwest, according to the National Association of Realtors (NAR).
NAR reports that the Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, inched up 0.2% to 101.7 in November from a downwardly revised 101.5 in October, but is 1.6% below November 2012 when it was 103.3. The data reflects contracts but not closings.
Lawrence Yun, chief economist for NAR, says the market is flattening: "We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014."
He adds, "Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years."
Yun also says the market still favors buyers in most of the country, but higher mortgage interest rates, in combination with strong price gains, mean a more modest growth in values is expected in 2014.
NAR reports that the PHSI in the Northeast declined 2.7% to 82.6 in November but is 1.9% above that of a year ago. In the Midwest, the index fell 3.1% to 100.6 in November, but is 0.4% higher than in November 2012.
The data shows that pending home sales in the South rose 2.3% to an index of 116.1 in November and are 0.1% above levels from a year ago. The index in the West increased 1.8% in November to 95.0, but is 8.7% below that of November 2012, in part from inventory constraints.
According to NAR, total existing-home sales this year are expected to reach 5.1 million – a gain of almost 10% over 2012 – but should stay at that level in 2014 and then rise to 5.3 million in 2015.
NAR says the national median existing-home price for all of this year will be close to $197,300 – up nearly 12% from 2012 – but is projected to rise at a more moderate pace of 5% to 5.5% in 2014, and grow another 4% in 2015.