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US pending home sales rose a slight 0.2 percent in November

By JOSH BOAK
AP Economics Writer

WASHINGTON (AP) — Slightly more people signed contracts in November to buy homes, and pending sales rose just 0.2 percent as the housing market coped with a dwindling supply of properties on the market.

The National Association of Realtors said Wednesday that its index of pending home sales hit 109.5 in November. The modest increase followed a 3.5 percent increase in October.

More Americans are shopping for homes as the economy has improved. The low 4.1 percent unemployment rate has helped lift demand from would-be homebuyers, as the slow recovery from the 2008 financial crisis has built up momentum after years of steady but unspectacular gains. Yet the demand has done little to bring more home-sellers into the market, resulting in a shortage of listings that has pushed up prices and given rise to a rush to buy in many metro areas.

A "Sale Pending" placard is seen in 2015 atop a realty sign outside a home for sale in Surfside, Fla. (AP Photo/Wilfredo Lee, File)

A “Sale Pending” placard is seen in 2015 atop a realty sign outside a home for sale in Surfside, Fla. (AP Photo/Wilfredo Lee, File)

In November, the number of signed contracts rose in the Northeast and Midwest but slumped in the South and West.

Pending sales contracts are a barometer of future purchases. Sales are typically completed a month or two after a contract is signed.

The pending sales index has improved just 0.8 percent over the past year, as would-be buyers are finding that fewer homes are being listed for sale.

The number of homes listed for sale has dropped nearly 10 percent over the past year, the Realtors said earlier this month. Many homeowners are choosing to build up their equity or find themselves unable to afford another house if they sell their current residence. This situation has contributed to a 6.2 percent jump in home prices over the 12 months, according to the S&P CoreLogic Case-Shiller index.

With home prices rising faster than incomes, it’s becoming increasingly likely that people seeking homes could be priced out of the market. This, in turn, has caused homes to remain on the market for fewer days.

Some of the financial pressures from rising home prices have been minimized by cheaper borrowing costs.

The mortgage giant Freddie Mac said last week that the rate on 30-year fixed-rate mortgages averaged 3.94 percent, down from 4.30 percent a year ago.

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