Pending home sales rose 0.2% to an index reading of 109.5 in November, from an unrevised 3.5% gain to 109.3 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 increased 0.8% from last November, when the index was 108.6.

IFR Markets predicted the index would be up 1.5%.

Regionally, pending sales were mixed. The Northeast saw a 4.1% rise to 98.9, and sales gained 0.4% to 105.8 in the Midwest, while declining 0.4% in the South to 123.1 , and dropping 1.8% in the West to 100.4.

“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” NAR Chief Economist Lawrence Yun said. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”

"The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability," according to Yun. "Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home."

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.