Rising mortgage rates and a lack of inventory "dispirited" many prospective buyers and drove pending home sales down slightly in November, the National Association of Realtors said.
As a result, the NAR's Pending Home Sales Index fell to 107.3 from 110.0 in October. All but one of the four major regions of the nation saw declines in contract signings for the month.
"The budget of many prospective buyers was dealt an abrupt hit by the quick ascension of rates immediately after the election," said Lawrence Yun, chief economist for the NAR. "Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract."
On a positive note, the NAR expects existing home sales to close 2016 at a pace of about 5.42 million units. If that prediction holds true, the current year would surpass 2015 (5.25 million units) as the highest since 2006 (6.48 million).
Looking forward, the NAR predicts existing home sales in 2017 will expand by about two percent to 5.52 million units.
The PHSI in the Northeast edged slightly higher, 0.6 percent to 97.5 in November. But the Midwest declined 2.5 percent to 103.5; the South dropped 1.2 percent to 118.7; and the West shed 6.7 percent to 101.0.