Pending-Home Sales Rebound Last Month, Despite a Recent Jump in Mortgage Rates

Bloomberg writer Austin Weinstein reported on Tuesday that, “Contracts to buy previously owned U.S. homes rebounded last month as buyers adjusted to the recent jump in mortgage rates, according to figures released Monday from the National Association of Realtors in Washington.

“The increase in contract signings follows a post-election jump in borrowing costs that pushed down pending sales in November. While steady growth in jobs, wages and the economy will continue to underpin home purchases, the supply of available properties is at historic lows, limiting any potential gains in the market. With the Federal Reserve projecting three interest-rate increases this year, further increases in mortgage costs could put houses out of reach for some buyers.”

The article noted that, “‘The main storyline in the early months of 2017 will be if supply can meaningfully increase to keep price growth at a moderate enough level for households to absorb higher borrowing costs,’ Lawrence Yun, NAR’s chief economist, said in a statement. ‘Sales will struggle to build on last year’s strong pace if inventory conditions don’t improve.'”

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