The numbers: U.S. pending-home sales rose 2.5% in November, reversing a six-month losing streak, according to the monthly index released Friday by the National Association of Realtors .
Pending home sales were down for six months in a row, as the U.S. Federal Reserve increased interest rates and mortgage rates took off. Pending-home sales beat analyst expectations. Analysts polled by the Wall Street Journal had forecast the pending home sales index to drop by 1%.Pending home sales reflect transactions where the contract has been signed for an existing-home sale, but the sale has not yet closed.Mortgage application activity hints at the housing market’s further recovery. Mortgage demand rose in the latest week.On a monthly basis, pending sales rose in the South and the West.
What the realtors said: “This recent low point in home sales activity is likely over,” NAR Chief Economist Lawrence Yun said. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”He also expects the South to outperform in terms of sales, since the job market is stronger in the region.
Market reaction: The Dow Jones Industrial Average DJIA, +0.14% and the S&P 500 SPX, +0.21% were mixed in early trading on Friday. The yield on the 10-year Treasury note TMUBMUSD10Y, 3.549% rose above 3.5%.