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Lower mortgage rates and slowing price growth pushed pending home sales up 3.3% in November, the largest jump in contract signings since early 2023, as even modest signs of cooling in the US housing market brought buyers to the table.
Monday’s report from the National Association of Realtors showed November’s jump from the prior month outpacing a 0.9% increase that economists expected.
Compared with a year earlier, contract activity is up 2.6%. All regions of the country saw an uptick in homes going under contract last month, with the West showing the biggest month-over-month gain at 9.2%.
“Homebuyer momentum is building,” NAR chief economist Lawrence Yun said in a statement.
“Improving housing affordability — driven by lower mortgage rates and wage growth rising faster than home prices — is helping buyers test the market,” he said. “More inventory choices compared to last year are also attracting more buyers to the market.”
Homes usually go under contract a month or two before they’re sold, making pending home sales a leading indicator of market activity.
The housing market has been stuck in a deep freeze since mortgage rates began rapidly rising in mid-2022. Higher mortgage rates, combined with the rapid run-up in home prices during the pandemic, priced many would-be buyers out of the market altogether.
The average rate on a 30-year mortgage has stood near 6.2% over the past two months, down from a high of 7% in early 2025 and a range closer to 6.75% that prevailed through much of the summer.
The latest jump in activity comes off a low base, however, with the Pending Home Sales Index improving in November to 79.2. A level of 100 is equal to the average contract activity in 2001.
Home sales in 2025 are likely to be at or near three-decade lows. Many economists and analysts, however, expect the housing market will gradually start to normalize as inventory levels improve, mortgage rates move lower, and wage growth outpaces gains in home prices.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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