Any expected Trump bump in home sales didn't materialize in contracts for homes signed in November.
Higher mortgage rates hit home sales, driving the National Association of Realtors Pending Home Sales Index down 2.5 percent in November from October, the NAR reported Wednesday. Analysts had forecast a 0.4 percent gain in the index, which is now 0.4 percent lower than a year ago and at its lowest level since January.
The Realtors blame the drop on the low supply of available homes and rising mortgage rates.
"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," said Lawrence Yun, NAR's chief economist.
Regionally, only pending home sales in the Northeast saw a slight gain, up 0.6 percent in November and 5.7 percent from a year ago. The West saw the steepest decline, down 6.7 percent for the month and down 1 percent from last year. The Midwest fell 2.5 percent for the month and 2.4 percent year over year; the South saw a 1.2 percent drop last month and a 1.3 percent decline on the year.
While affordability remains a concern, strong job growth and tight supply could keep prices rising.
Tolbert Rowe, vice president of lending for Bay Capital Mortgage, expects home sales in the rural Maryland area he primarily serves to pick up in the next year, especially among first-time buyers who are experiencing higher rents.
"There are still pockets on the Eastern Shore where you can buy a house and have a mortgage payment comparable to what you would pay in rent or in many cases less than what you would be paying in rent, and that's going to hold true I think as long as we can keep rates in the 4½ percent range or less."