MNI DATA IMPACT: US Nov Pending Home Sales Below Expected

U.S. pending home sales fell 2.6% in November, below expectations for a flat reading and marking the third straight month of decline, the National Association of Realtors reported Wednesday. Still, the group's Pending Homes Sales Index reached an all-time high for November of 125.7.

"The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices," NAR chief economist Lawrence Yun said in a statement. "It is important to keep in mind that the current sales and prices are far stronger than a year ago."

Monthly contract activity slipped in all four major sales regions, the NAR said, but each region saw gains in year-over-year activity. Nationally, contract signings were up 16.4% from one year ago.

The outlook for the housing market in 2021 is favorable, Yun said, predicting a slight increase in mortgage rates to 3% from the current 2.7% and a 10% increase in existing home sales. New home sales should grow by 20% next year, he said.

"Economic growth is guaranteed from the stimulus package and from vaccine distribution, but high government borrowing will put modest upward pressure on interest rates," he said.