Source: Housing Wire —
Key Takeaways
- November 2022 pending home sales decreased 4% compared to October and 38% compared to a year ago.
- Many factors are leading to the slowdown, including high interest rates, fears of a recession, and unprecedented home sales in the past few years.
- While some experts predict a small decline in home prices, many expect the housing market to rebound come 2024.
Pending home sales have been dropping for the last six months as buyers pump the brakes on making large purchases. But other issues are at play, including comparing today’s numbers against the unprecedented demand during the pandemic. Here is the latest data on pending home sales and what it may signal moving forward.
What are Pending Home Sales?
A home is pending sale when the buyer and seller come to a purchase agreement for a house. This is also referred to as being under contract because both parties have contractually agreed to the terms and conditions of the sale, including the price, inspections, contingencies, etc. The sale of the house will close or be completed once the lending bank reviews all of the buyer’s documents, approves the loan, and the buyer and seller meet to sign the paperwork. This process usually takes roughly 30-45 days.
A home designated as a pending sale has reached a point where the seller has settled on a buyer. No other buyers can make offers on the house at this point, and the seller is contractually obligated to sell the home to the accepted buyer. If a seller decides to break the contract to sell to another buyer, the original buyer can sue the seller for breach of contract.
Pending home sale numbers are a leading economic indicator for housing market growth and the economy at large. Homebuyers, whether buying their first home or moving from one house to another, help fuel the economy through purchases for their new home. This large items such as replacement appliances to new linens for bedding.
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