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The drop reverses an increase in Oct. NAR Economist Yun attributes it to a tight inventory supply and buyer hesitation over rising home prices.<\/span><\/span><\/p>\n<\/div>\n WASHINGTON \u2013 Pending home sales slipped in November (down 2.2%), receding slightly after a previous month of gains, according to the National Association of Realtors\u00ae (NAR). Each of the four major U.S. regions included in the monthly study saw a month-to-month decline. The drop was similar (down 2.7%) year-over-year.<\/span><\/span><\/p>\n The Pending Home Sales Index (PHSI) \u2013 a forward-looking indicator of home sales based on contract signings \u2013 fell to 122.4 in November. An index of 100 is equal to the level of contract activity in 2001.<\/span><\/span><\/p>\n \u201cThere was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,\u201d says Lawrence Yun, NAR\u2019s chief economist. \u201cWhile I expect neither a price reduction nor another year of record-pace price gains, the market will see more inventory in 2022, and that will help some consumers with affordability.\u201d<\/span><\/span><\/p>\n Yun says overall housing demand remains high, noting that homes placed on the market go from \u201clisted status\u201d to \u201cunder contract\u201d in about 18 days.<\/span><\/span><\/p>\n \u201cBuyer competition alone is unrelenting, but home seekers have also had to contend with the negative impacts of supply chain disruptions and labor shortages this year,\u201d he says. \u201cThese aspects, along with the exorbitant prices and a lack of available homes, have created a much tougher buying season.\u201d<\/span><\/span><\/p>\n Yun adds one more reason into the mix for the December decline: The omicron variant of the COVID-19 virus. He says that poses a risk to the housing market\u2019s performance, as buyers and sellers are sidelined, and home construction is delayed.<\/span><\/span><\/p>\n Regional breakdown<\/strong>: Month-over-month, the Northeast PHSI declined 0.1% to 99.4 in November, an 8.5% drop from a year ago. In the Midwest, the index fell 6.3% to 116.8 month-to-month, up 0.2% from November 2020.<\/span><\/span><\/p>\n\n