Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

U.S. pending home sales drop

mortgage rates

The National Association of Realtors said its Pending Home Sales Index dropped 2.6% last month

Contracts to buy U.S. previously owned homes fell for a third straight month in November as an acute shortage of properties pushed up prices, though the housing market remains supported by record-low mortgage rates.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, fell 2.6% last month to 125.7. Economists polled by Reuters had forecast pending home contracts, which become sales after a month or two, would be unchanged in November from the month before.

Compared with a year ago, pending home sales jumped 16.4% in November. Sales of existing homes have slackened recently, declining in November for the first time in six months.

The housing market is being driven by record low mortgage rates. The COVID-19 pandemic, which has seen at least 21% of the labour force working from home, has led to a migration from city centres to suburbs and other low-density areas as Americans seek out more spacious accommodation for home offices and schools.

The coronavirus-triggered recession, which started in February, has disproportionately affected lower-wage earners. At least 20 million people are on unemployment benefits. The 30-year fixed mortgage rate is around an average 2.86%, according to the most recent data from the Mortgage Bankers Association.

Housing supply has failed to keep up with demand, boosting home prices out of the reach of many first-time buyers, despite builders ramping up construction.

Though homebuilder confidence is at historic highs, builders have complained about shortages of land and materials.

Pending home sales declined in all four regions. They fell 1.1% in the South, 4.7% in the West, 3.3% in the Northeast, and 3.1% in the Midwest.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.