U.S. pending home sales rise in November, existing home sales likely to improve further in months ahead

Pending home sales in the U.S. rose in the month of November in contrast to the expectations of a modest drop. Sales were up 0.2 percent sequentially, as compared with consensus expectation of a decline of 0.4 percent. In October, sales were up robustly. Much of the rebound was viewed as post-storm normalization, which is likely to be completed within the month. Therefore, some moderation was expected in November.

Region wise, details indicate strength in November was mainly driven by a strong increase in pending home sales in the Northeast. This was partly countered by a marked decline in sales in the West. Sales in the South modestly dropped after rebounding sharply in October, taking sales back towards pre-storm levels.

Pending home sales gauge housing contract activity based on signed real estate contracts for existing single-family homes, condos, and co-ops. They usually drive existing home sales by one month or two.

“As a result, we expect further improvement in existing home sales in the coming months”, stated Barclays in a research report.

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