US pending home sales edge higher in November

Pending home sales in the States edged higher last month, according to one of the sector's leading industry groups, but existing home sales were seen flatlining in 2018 due to sharp price growth and the impact of recently approved changes to the country's tax laws.

The National Association of Realtors' pending home sales index increased at a 0.2% month-on-month clip in November to reach 109.5 (Barclays: -0.3%) and was left standing 0.8% above its year-earlier level.

"The strengthening economy, and expectation that more millennials will want to buy, serve as promising signs for solid homebuying demand next year, while also putting additional pressure on inventory levels and affordability," said NAR chief economist Lawrence Yun.

"Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative. Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home."

Yun's forecasts called for an annualised pace of existing home sales of around 5.54m in 2017, alongside a 6% rise in prices.

That was expected to pave the way for a decline of 0.4% in the volume of sales in 2018 and price growth of about 2%.

The biggest increase in the PHI in November was seen in the Northeast, where it climbed 4.1%, while in the Midwest it advanced 0.4%, falling by 0.4% in the South and 1.8% in the West.