Having seen New Home Sales disappoint and Existing Home Sales crash in November, Pending Home Sales plunged 0.9% MoM (against expectations of a 0.7% MoM rise). Having plateaued in October near 8-month lows, today's huge miss was driven by a plunge in sales in The West (-5.5%) and NorthEast (-3.0%). Home sales rose just 2.6% YoY - the weakest since October 2014. The excuse factory was busy with weather, home prices, and inventory trotted out but, perhaps most notably, Realtors warned that higher mortgage rates will temper sales growth in an explicit threat to Janet to "hold."
As NAR reports,
The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 0.9 percent to 106.9 in November from an upwardly revised 107.9 in October but is still 2.7 percent above November 2014 (104.1).
Although the index has increased year-over-year for 15 consecutive months, last month's annual gain was the smallest since October 2014 (2.6 percent).
The excuse-fest was rampant, Lawrence Yun, NAR chief economist, says November's dip in contract activity continues the modestly slowing trend seen ever since pending sales peaked to an over nine year high back in May.
"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," he said.
"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."
"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," adds Yun.
So prices are too high... and rate-hikes make it even less affordable?