Contract signings to purchase previously owned U.S. homes unexpectedly fell for a second month in November, offering yet another sign that the housing market is struggling.
The index of pending home sales decreased 0.7%, according to data released Dec. 28 by the National Association of Realtors in Washington. The gauge slumped 7.7% from a year earlier on an unadjusted basis, following a downwardly revised 4.7% drop in October.
The weaker results underscore the challenges as elevated prices and higher mortgage rates keep many Americans on the sidelines of the housing market. Economists consider pending-home sales a leading indicator because they track contract signings; purchases of existing homes are tabulated when deals close, typically a month or two later.
The monthly reading fell below all but one estimate in Bloomberg’s survey of economists, which had called for a 1% increase from the prior month. October;s monthly reading was unrevised from a 2.6% decline versus prior month.
Pending home sales fell in the Midwest and South, which both dropped more than 2% from the prior month, while the Northeast and West saw increases. While the report doesn’t signal a dramatic collapse in housing, the recovery may have trouble gaining traction. Previously released NAR data showed purchases of previously owned houses rose for a second straight month and exceeded forecasts in November.
The latest report on new home sales from the Census Bureau and Department of Housing and Urban Development showed a slump in October to the weakest pace since March 2016. The November report that had been scheduled for release this week was postponed because of the U.S. government shutdown and hasn’t been rescheduled.