The U.S. existing home market continued its growth momentum in November, with contract signings reaching the highest level since early 2023. According to data released by the National Association of Realtors (NAR), the number of existing home contract signings rose by 2.2% in November to 79, marking the highest point since February 2023. This increase far exceeded the median forecast of 0.8% by economists surveyed by Bloomberg.
The volume of existing home contract signings is a leading indicator of the housing market's activity, as it usually takes one to two months to complete a transaction after signing. This data is consistent with the previously reported growth trend in existing home sales in November, indicating that despite high mortgage rates, home buying demand is warming up.
NAR's Chief Economist Lawrence Yun stated, "Consumers seem to have adjusted their expectations for mortgage rates and are taking advantage of the increased inventory." He noted that buyers are no longer waiting or expecting a significant drop in mortgage rates but are choosing to transact under current market conditions.
Despite the continued rise in U.S. mortgage rates, market data shows consumer confidence has somewhat recovered, with homebuyers adapting to the new interest rate environment. According to NAR's analysis, the increase in inventory has provided potential buyers with more options, which is an important factor for the four-month consecutive rise in contract signings.
The performance of the existing home market also suggests that, despite uncertainty in the overall economic environment, housing demand remains strong. As 2024 approaches, the market will closely watch the trajectory of mortgage rates over the coming months and their further impact on the housing market.
