Pending home sales saw small gains in November while existing home sales and price growth are expected to slow heading into 2018, according to the National Association of Realtors.
The Pending Home Sales Index rose from 109.3 in October 2017 to 109.5 in November 2017, a 0.2 percent increase. This is 0.8 percent higher than November and slightly below the 2017 peak of 110 in June.
“The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear,” said Lawrence Yun, NAR chief economist. “However, new buyers coming into the market are finding out quickly that their options are limited and competition is robust. Realtors say many would-be buyers from earlier this year, stifled by tight supply and higher prices, are still trying to buy a home.”
Yun predicts that existing-home sales will increase 1.7 percent from 5.45 million in 2016 to 5.54 million at the end of 2017, and the national median existing-home price will be up 6 percent. However, he anticipates a 0.4 percent decline in existing sales and about a 2 percent increase in prices in 2018.
“The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability,” Yun said. “Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home.”