The National Association of Realtors (NAR) Pending Home Sales Index (PHSI), a forward-looking indicator that tracks homes sales in which a contract is signed but the sale has not yet closed, increased 0.2 percent in the month of November to 109.5 from 109.3 in October.

NAR Chief Economist Lawrence Yun credits the small gain in November to a strong jobs market and overall healthy economy. But Yun expects pending home and existing home sales to slow in the coming year, due to continued inventory shortages and concerns about how the tax bill will impact homeowners and buyers in high-priced markets.

“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” said Yun in a statement. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.

 

November’s PHSI marks the highest recorded since June (110.0), and is 0.8 percent higher than a year ago. Inventory has continued to decline for the 30th consecutive month with levels at a 3.4-month supply. Yun expects existing home sales to finish 2017 at around 5.54 million — a 1.7 percent increase over 2016 (5.45 million).

“Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative,” he said. “Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home. The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability.”

NAR uses a large national sample of signed residential property sale contracts to build its monthly pending home sales index. The sample size typically represents about 20 percent of transactions for existing-home sales.

The index level was benchmarked to 100 in 2001, which was the first year to be examined. Existing-home sales in 2001 were in the 5 million to 5.5 million range, which is considered normal for the population in the U.S.

Email Marian McPherson.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×