U.S. Pending Home Sales Rose in November Despite Higher Mortgage Rates

The U.S. housing market showed signs of resilience in November, with pending home sales rising despite higher mortgage rates. According to the National Association of Realtors (NAR), the Pending Home Sales Index (PHSI) climbed 2.2% month over month and 6.9% year over year, reaching its highest level since February 2023. This increase in contract signings indicates a strong rebound in buyer demand, driven by favorable seasonal dynamics and a growing inventory of homes.

Mortgage rates hovered in the high-6% range through November, their highest level since the summer. However, inventory levels outweighed mortgage rates, as late-fall buyers took advantage of a slower, less competitive market. New-home sales, which are also based on contract signings, picked up in November as well, growing 5.9% monthly and 8.7% annually. Though interest rates remain a challenge across the market, the seasonal slide in home prices and slower market mean more buyers are willing to come off the sidelines.



Contract signings climbed annually in all four regions as buyers took advantage of building home supply. The South saw a slight monthly decrease in pending home sales, but it was still 5.6% higher annually. The South, West, and Midwest all saw contract signings increase on both a monthly and annual basis. The South led the pack on a monthly basis, with a 5.2% monthly increase, followed by the West (+0.5%) and the Midwest (+0.4%). Annually, the West saw the largest pickup (+11.8%), followed by the South (+8.5%) and the Midwest (+1.6%).



The late fall market has suffered from climbing mortgage rates, but buyers seem eager to take advantage of the favorable seasonal dynamics. The South and West are leading the annual rebound in contract signings, aligning with our Top Market expectations for 2025. Despite rising mortgage rates through much of 2024, recent indications show growing boldness among homebuyers heading into the new year. A report released Monday by the National Association of Realtors (NAR) showed an increase in pending home sales for the fourth consecutive month.

In conclusion, the U.S. housing market demonstrated resilience in November, with pending home sales rising despite higher mortgage rates. Buyers took advantage of ample home inventory and favorable seasonal market dynamics, leading to a strong rebound in contract signings. The South and West led the annual rebound in contract signings, aligning with our Top Market expectations for 2025. Despite the challenges posed by higher mortgage rates, the housing market appears poised for a strong start to the new year.