Pending home sales decreased 2.5% to an index reading of 107.3 in November, after an unrevised 0.1% gain to 110.0 in October, according to a report released Wednesday by the National Association of Realtors.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index decreased 0.4% from last November, when the index was 107.7.
Regionally, pending sales were mostly lower. The Northeast saw a 0.6% increase to 97.5, while sales fell 2.5% to 103.5 in the Midwest. Sales dropped 6.7% in the West to 101.0 and sales declined 1.2% in the South to 118.7.
"The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election," NAR Chief Economist Lawrence Yun said. "Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract."
The increasing cost of mortgages will dampen the outlook for housing, he noted.
Economists polled by Thomson Reuters predicted the index would be up 0.5%.
