For the third time in four months, the Pending Home Sales Index decreased in November, but has increased year-over-year for 15 consecutive months. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased 0.9% in November to 106.9 from an upwardly revised 107.9 in October, but remained 2.7% above the same month a year ago.
The PHSI increased in the South and Midwest by 1.3% and 1.0% respectively, but declined in the Northeast and West by 3.0% and 5.5% respectively. Year- over-year, all four regions were up, ranging from 4.5% in the West to 0.5% in the South.
Existing sales declined 10.5% in November. That steep decline was partially attributed to the implementation of The Know Before You Owe mortgage disclosure rule by the Consumer Financial Protection Bureau, and not to a collapse in demand. Improving economic conditions and rising employment suggest a continuing recovery in existing sales. However, the long-term weakness among first-time buyers will limit all sales as we head into 2016, and the decline in pending sales inserts a degree of caution.