Contract Signings to Buy Existing U.S. Homes Rose in November

(Bloomberg) -- A measure of contract signings for the purchase of previously owned U.S. homes unexpectedly increased in November after surging a month earlier, according to data released Wednesday by the National Association of Realtors.

Key Takeaways

The increase in contract signings indicates previously owned home sales, tabulated when a deal closes, will stay steady in coming months after climbing in November to an almost 11-year high. Robust employment and cheap borrowing costs are underpinning the housing recovery. Nonetheless, lean inventory remains a hurdle for the market as it’s keeping home prices rising faster than income growth.

Official’s Views

“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” Lawrence Yun, NAR’s chief economist, said in a statement. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust.”

Other Details

• Purchases advanced 4.1 percent in the Northeast and 0.4 percent in the Midwest
• Contract signings dropped 1.8 percent in the West and fell 0.4 percent in the South
• Economists consider pending sales a leading indicator because they track contract signings. Purchases of existing homes are tabulated when a deal closes, typically a month or two later

--With assistance from Jordan Yadoo

To contact the reporters on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net, Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net.

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Randall Woods

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