Pending home sales in November bounced back from last month’s decline, led by gains in the West.

The Pending Home Sales Index (PHSI), reported by the National Association of Realtors (NAR), is a forward-looking indicator based on signed contracts. The PHSI rose 1.2% from 107.2 in October to 108.5 in November. Sales were 7.4% higher than a year ago, the highest year-over-year gain since 2016.

The November PHSI were mixed regionally. The measure was 1.0% and 5.5% higher in the Midwest and the West, but fell 0.1% and 0.2% in the Northeast and the South. Year-over-year, the PHSI grew in all four regions, ranging from 2.6% in the Northeast to 14.0% in the West.

Though the gain in November suggests the housing market continuing benefit from lower mortgage rates and robust job market, housing supply has not kept up with demand. Housing inventory remains a challenge as it has been declined for six straight months.

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