Pending home sales in the United States reached a 21-month high in November

(Reuters) – Contracts for previously owned homes in the United States rose more than expected in November, posting gains for the fourth straight month, as buyers focused on taking advantage of improved inventory despite rising mortgage interest rates.

The National Association of Realtors (NAR) said Monday that its pending home sales index, based on signed contracts, rose 2.2% last month to 79.0 — the highest level since February 2023 — from 77.3 in October. Economists polled by Reuters had expected contracts, which become sales after a month or two, to rise 0.9% after a 1.8% increase in October.

Pending home sales increased by 6.9% compared to the previous year. On a regional basis, the Midwest, South and West saw monthly increases while contract signings declined in the Northeast. All four regions recorded annual gains.

The increase in contract signings in November was accompanied by the second straight rise in existing home purchase completions last month that NAR previously reported. This previous report showed that the inventory of homes for sale in November was up nearly 18% from a year earlier.

“Consumers appear to have reset their expectations regarding mortgage rates and are taking advantage of more available inventory,” said Lawrence Yun, chief economist at NAR. “Mortgage rates have averaged over 6% over the past 24 months. Buyers are no longer waiting or expecting mortgage rates to drop significantly. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.” “

In fact, the interest rate on 30-year fixed-rate mortgages has risen in the past two months to the highest level since July at 6.85%, according to Freddie Mac, essentially reversing the interest rate cuts the Fed has made since September. .

Ten-year US Treasury bonds, which are considered the biggest influence in determining interest rates on most home loans, have risen by about one percentage point since last September. It happened as bond market investors became increasingly concerned about how policies favored by President-elect Donald Trump — such as tariffs, tax cuts and a crackdown on immigration — might lead to higher inflation.

(Reporting by Dan Burns, Editing by Chizuo Nomiyama)