The U.S. Pending Home Sales Index rose 3.3% in November compared to October, outpacing expectations of a 1.0% gain and topping the prior month’s 1.9% increase. This index tracks contracts signed on existing homes, condos, and co-ops, giving a forward look at sales likely to close in the coming one to two months. From November 2024, contracts climbed 2.6%, signaling a modest recovery after a tougher year.
Think of pending home sales as a sneak peek into the housing market’s health. When buyers sign contracts, it points to deals that will likely finalize soon, unlike closed sales data that lags behind. The National Association of Realtors compiles this index monthly, using contracts from its member agents nationwide. This November jump marks the strongest monthly gain of 2025 so far and the best in nearly three years, back to February 2023. NAR Chief Economist Lawrence Yun noted that homebuyer momentum builds after seasonal adjustments.
Several factors fuel this uptick. Mortgage rates hovered around 6% through late fall, easing from summer peaks above 7%, which pulled more buyers off the sidelines. Inventory grew for months, with active listings topping one million homes for half a year straight, giving shoppers more choices. Job growth held steady, and consumer confidence ticked up, encouraging commitments despite high prices. Yet affordability remains a hurdle; median list prices sat near $424,000, up slightly year over year. Lower rates help, but not enough for everyone to jump in fully.
Gains spread across all four U.S. regions, though at different speeds. The Northeast saw a 1.8% monthly increase and matched that year over year. The Midwest posted a 1.3% monthly rise and 2.2% from last November. The South led with 2.4% month to month and 3.3% annually, boosted by ample supply and job hubs. The West rounded out with gains in both measures, rebounding from earlier dips tied to steep costs.
The South outperformed others monthly and yearly, thanks to faster inventory buildup and milder weather drawing movers. Compare that to the Northeast’s steadier 1.8% in both periods, where harsh winters often slow deals. The Midwest trailed monthly at 1.3% but held strong yearly at 2.2%, reflecting better price entry points. The West, hit hardest earlier by low supply and high values, still joined the upward trend, unlike its October decline. Nationally, this uniform lift contrasts prior months when the West often lagged, highlighting broader stabilization.
Buyers respond to subtle shifts. Rates dipping toward 6% cut monthly payments enough to revive interest, especially with holiday slowdowns lengthening market time and spurring seller flexibility. NAR surveys show 22% of agents expect more buyer traffic soon, up from 17% in October. Inventory climbs help too; more homes mean less frenzy and better deals. Economic resilience plays in, with solid jobs avoiding recession fears. Regional differences stem from local affordability: Midwest and South offer value, while coastal areas fight pricier baselines. Yet caution lingers; if rates rebound or listings stall, momentum could fade.
Agents see 18% anticipating seller upticks, signaling balanced activity ahead. This data hints at closing sales rising into 2026, assuming rates cooperate and jobs endure. Watch inventory and rates closely; they dictate if this builds or plateaus.
