Pending home sales decreased 0.9% in November compared with October but increased 2.7% compared with November 2014, according to the National Association of Realtors (NAR).
It was the third time in four months that pending home sales decreased, as buyers continue to battle both rising home prices and limited homes available for sale.
Although the index has increased year-over-year for 15 consecutive months, last month’s annual gain was the smallest since October 2014, which was 2.6%, NAR says in a release.
“Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months, despite low mortgage rates and solid job gains,” says Lawrence Yun, chief economist for NAR. “While feedback from Realtors continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.”
According to Yun, with existing housing inventory already below year-ago levels and new home construction still deficient, it’s likely supply constraints and faster price appreciation will reappear once the spring buying season begins.
“Especially with mortgage rates likely on the rise, affordability issues could creep up enough to temper sales growth – especially to first-time buyers in higher-priced markets,” he says.
Currently, NAR is forecasting that existing-home sales will reach a pace of around 5.25 million in December – the highest since 2006 but a decrease of about 25% compared with the peak set in 2005 (7.08 million).
The national median existing-home price for 2015 will be close to $220,700, up about 6.0% from a year ago.
For more, including a regional breakdown of pending home sales for November, clickhere.