Pending home sales remained mostly flat in November as the housing market reached a “cyclical low,” the National Association of Realtors (NAR) reported.
A forward-looking indicator that’s based on sales under contract, pending home sales increased 0.2 percent month over month in November, marking the first time in six months that pending home sales increased on a monthly basis. On an annual basis, pending home sales dropped 1.6 percent compared to a year ago, NAR said.
“We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” NAR Chief Economist Lawrence Yun said in a statement. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.”
NAR recently reported that existing-home sales dropped on an annual basis for the first time in 29 months in November. Meanwhile, purchase loan applications — a forward-looking indicator of existing-home purchases financed by mortgages — slid further for the week ending Dec. 20 from the one-year low they hit a week before.
Though pending home sales have trended downwards in recent months, NAR expects existing-home sales to increase to 5.1 million in 2013. That would mark a 10 percent gain compared to 2012. After that, existing-home sales are expected to remain flat in 2014 and then rise by 4 percent in 2015 to 5.3 million, NAR said.