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US pending home sales fall to second lowest level in 20 years

US home sales hit a 20-year low in November.

According to the National Association of Realtors (NAR), the monthly drop from October to November in the Pending Home Sales Index (PHS) was 4%. In the annual comparison, the drop in 2022 is 37.8%.

“Home sales posted the second-lowest monthly reading in 20 years as interest rates, which rose at one of the fastest paces on record this year, dramatically reduced the number of contract signings to buy a home. The drop in home sales and construction has hurt overall economic activity,” said Lawrence Yun, chief economist at NAR.

“The residential investment component of GDP has fallen for six consecutive quarters. There is approximately a two month delay between mortgage rates and home sales. With mortgage rates falling throughout December, home-buying activity is bound to pick up in the coming months and help economic growth.”

According to the survey, all four US regions included in the survey (Northeast, Midwest, South and West) had declines in November, compared to October.

The Pending Home Sales Index (PHS) is an indicator of real estate activity based on signed real estate contracts for homes. A sale is listed as pending when the contract has been signed but the transaction has not closed

Source: CNN Brasil

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