US home contract signings at record levels in November

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Photo credit FILE - In this Sept. 29, 2020 file photo, a sale pending sign is displayed outside a residential home for sale in East Derry, N.H. The number of Americans signing contracts to buy homes fell for the second straight month as lack of available homes continue to stifle house hunters. The National Association of Realtors said Monday, Nov. 30 that its index of pending sales fell 1.1%, to 128.9 in October, down from a reading of 130.3 in September. (AP Photo/Charles Krupa, File)
By The Associated Press

SILVER SPRING, Md. (AP) — The number of Americans who signed contracts to buy homes declined last month, but was still a record high for November when a seasonal slowdown traditionally seeps into the real estate market.

The National Association of Realtors said Wednesday that its index of pending sales fell 2.6% to 125.7 in November, down from October's revised reading of 129.1. An index of 100 represents the level of contract activity in 2001. It was the third straight monthly decline.

Contract signings are a barometer of finalized purchases over the next two months, so Wednesday's report may preview what could be a strong winter for the housing market.

Contract signings are still 16.4% ahead of where they were last year, thanks to a big summer rebound that followed a spring washout due to the coronavirus outbreak. Contract signings in all four regions — the Northeast, South, Midwest and West — declined from October to November but are up double-digits year-over-year through last month.

Historically low interest rates are drawing prospective buyers into the market, but home prices have risen significantly the past year as supply remains near all-time lows.

U.S. home prices jumped 7.9% in October, the most June 2014, according to S&P CoreLogic Case-Shiller 20-city home price index released Tuesday.

Mortgage finance giant Freddie Mac reported last week that the average rate on the 30-year fixed-rate home loan remained at a record low 2.66%.