November Sales Fall 0.9%, More Than Anticipated
The National Association of Realtors reported that its index of pending homes sales was down 0.9 percent to 106.9 in November. Economists had expected a 0.7 percent increase, Bloomberg News reported. The index indicates market activity is at a typical level when at 100, using 2001 as a baseline year. The decline confirmed “earlier figures that showed the industry lost momentum toward the end of the year,” and the “pullback underscores concern raised by the slump in sales of existing homes last month, which the real-estate agents’ group argued was primarily caused by new mortgage-lending rules that delayed closings.” NAR chief economist Lawrence Yun said, “Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months.” The AP reported that the index decline shows the “real estate market appears to have cooled after sales gains for much of 2015.” The November reading was the lowest in 10 months, but it has “risen 2.7 percent from a year ago.” The Wall Street Journal reported that the increase on an annual basis suggests the housing market continues to make tentative progress.
What This Means For Small Businesses
Throughout the economy’s post-recession recovery, the housing market’s growth has been uneven. Heading into 2016, small businesses in construction and housing, in particular, may continue to see uneven growth, as the latest numbers from NAR may indicate a cooling in the housing market. In the latest Small Business Economic Trends report, NFIB Chief Economist William Dunkelberg said, “With weak expectations for sales and business conditions, prospects for strong inventory investment are poor.”
Reuters similarly says the decline in the index could indicate cooling in the US housing market.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.