Pending home sales gained 2.2% in November – the fourth consecutive month of increases and the highest level since February 2023 – according to the National Association of Realtors. The Midwest, South and West experienced month-over-month gains in transactions, while the Northeast decreased. Year-over-year, contract signings increased in all four U.S. regions, with the West leading the pack.

The Pending Home Sales Index (PHSI) – a forward-looking indicator of home sales based on contract signings – advanced 2.2% to 79.0 in November. Year-over-year, pending transactions improved 6.9%. An index of 100 is equal to the level of contract activity in 2001.

“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”

Pending Home Sales Regional Breakdown

The Northeast PHSI fell 1.3% from last month to 67.8, up 5.6% from November 2023. The Midwest index increased 0.4% to 78.1 in November, up 1.6% from the previous year.

The South PHSI improved 5.2% to 94.5 in November, up 8.5% from a year ago. The West index rose by 0.5% from the prior month to 64.3, up 11.8% from November 2023.

“It appears that some markets will outperform, driven primarily by local job gains and the flow of new inventory supply,” explained Yun.