Contracts to buy previously owned homes in the U.S. rose by 2.2% in November, reaching their highest level in 21 months, according to the National Association of Realtors (NAR). The Pending Home Sales Index climbed to 79.0 from 77.3 in October, marking the fourth consecutive month of gains. Economists had forecast a more modest increase of 0.9%. Buyers appear to be leveraging improved housing inventory levels, even as mortgage rates remain elevated.

Pending home sales rose 6.9% compared to a year earlier, with notable monthly increases in the Midwest, South, and West. However, the Northeast saw a slight decline in contract signings. The rise aligns with a previous NAR report showing existing home purchase completions also increased last month. Home inventory was nearly 18% higher in November compared to a year ago, offering buyers more negotiating power as the market shifts away from being seller-dominated.

• Pending home sales rose 2.2% in November, exceeding expectations and marking the fourth consecutive month of gains, signaling strong buyer demand.
• Year-over-year sales increased by 6.9%, reflecting resilience in the housing market despite elevated mortgage rates.
• Home inventory levels grew by nearly 18% compared to last year, providing buyers with more negotiating power and opportunities.
• The Midwest, South, and West regions posted notable monthly increases, highlighting broad-based recovery across key housing markets.
• Buyers have adapted to high mortgage rates, recalibrating their expectations and leveraging improved inventory to secure purchases.

• 30-year mortgage rates remain elevated at 6.85%, counteracting the benefits of recent Fed rate cuts and limiting affordability for many buyers.
• The Northeast saw a decline in contract signings, indicating regional disparities that could weigh on overall market performance.
• Concerns over President-elect Trump's inflationary policies may keep borrowing costs high, further pressuring buyer activity in 2025.
• Higher inventory levels could shift market dynamics further away from sellers, potentially slowing price growth and impacting seller confidence.
• Sustained gains in housing contracts may depend on broader economic stability and adjustments to persistent rate pressures, which remain uncertain.

Lawrence Yun, NAR's chief economist, noted that buyers have recalibrated their expectations around high mortgage rates and are taking advantage of expanded inventory. "Consumers are no longer waiting for or expecting mortgage rates to fall substantially," Yun said. However, mortgage rates, tied closely to the 10-year U.S. Treasury note, remain elevated as markets react to potential inflationary pressures tied to President-elect Donald Trump's policies.

Despite the challenges posed by high borrowing costs, the housing market's performance in November reflects strong demand and buyer adaptability. Analysts suggest that sustained improvements in housing inventory and macroeconomic stability will be critical in maintaining this momentum heading into 2025.