• Pending home sales increased in November, after a decline in October, the National Association of Realtors said
  • Low mortgage rates are one reason driving growth
  • The U.S. still faces a lack of affordable housing in some regions

The National Association of Realtors (NAR) said Monday that U.S. pending home sales increased in November, after a decline in sales in October.

The NAR pending home sales index rose 1.2% in November to 108.5, a jump from October’s 106.7. The pending home sales index is based on how many contracts were signed in the last month to buy previously owned homes.

“Despite the insufficient level of inventory, pending home contracts still increased in November,” NAR chief economist Lawrence Yun said. “The favorable conditions are expected through 2020 as well, but supply is not yet meeting the healthy demand.”

Pending home sales were up 7.4% compared to November 2018. The West saw home sales increase 5.5% last month, while the Midwest saw an increase of 1%.

Sales in the Northeast and South saw slight decreases.

The average rate for a 30-year fixed-rate mortgage is at 3.74%, down from 4.55% last year, mortgage buyer Freddie Mac revealed last week. The low rates are an incentive for individuals to buy a home. The Commerce Department said earlier this month that U.S. homebuilding grew by 3.2% to a seasonally adjusted rate of 1.365 million units in November.

At the same time, the U.S. faces a lack of affordable homes. A January survey from Attom Data Solutions said that renting a home is more affordable than buying in 59% of housing markets. Cities where it is cheaper to rent than buy include New York City and Miami.

Increase or decrease in pending home sales from the prior month (NAR)

January +4.6%

February -1%

March +3.8%

April -1.5%

May +2.5%

June +2.8%

July -2.5%

August +1.6%

September +1.5%

October -1.7%

November +1.2%