Housing contract activity, thanks to more inventory, rises for fourth straight month
Published On Dec 30, 2024, 10:00 AM
In November, housing contract activity experienced an increase for the fourth consecutive month, primarily driven by a rise in available inventory, despite mortgage rates remaining above 6%. The Pending Home Sales Index rose 2.2% from the previous month, marking its highest level since February 2023. Overall, pending home sales have increased by 6.9% compared to November 2023, with improvements seen in all regions except the Northeast. Economists suggest that consumers have adjusted their expectations regarding mortgage rates and are leveraging the increased availability of homes to negotiate better deals.
Stock Forecasts
DHI
Positive
With the rise in housing contract activity due to increased inventory and buyers adjusting their expectations on mortgage rates, there appears to be an optimistic outlook for the real estate sector. This could indicate potential growth for homebuilding stocks.
LOW
Positive
As more buyers enter the market, this could positively affect the demand for home improvement products, indicating an opportunity for related companies to benefit from increased spending.
XHB
Neutral
However, caution is warranted as the overall market for existing home sales is still projected to be one of the slowest in decades. Hence, investors should consider a balanced approach to avoid potential downturns in related sectors.
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