In November, pending home sales in the United States remained unchanged compared to the previous month, pointing to a concerning trend in the housing market. According to the National Association of Realtors (NAR), pending home sales, which represent signed contracts that have not yet closed, reached a new record low, highlighting the challenges faced by the real estate industry.

The NAR's leading index for existing home sales showed no improvement in November, with a flat growth of 0.0% compared to the previous month's decline of 1.5%. This data reveals a notable shift from the same period last year, as pending home sales dropped in all four regions of the country. The decline in sales suggests a loss of momentum in the recovering housing market.

One factor contributing to the low levels of pending home sales is the high number of individuals still locked into low mortgage rates of 2-3% in an environment with interest rates hovering around 6-8%. This scenario, often referred to as "golden handcuffs," hinders buyers from entering the market, thus dampening sales activity.

The Federal Reserve's effort to stimulate the market by implementing 100 basis points of interest rate cuts has not adequately addressed this issue. To truly revive the housing market, some experts argue that the Fed would need to reinstate the zero-interest rate policy (ZIRP), which would effectively unfreeze the market and encourage more homebuyers to enter.

Revisions made by the NAR indicate that October's pending home sales figures were slightly higher than originally reported, with a revision from 71.4 to 71.6. However, despite this adjustment, November's pending home sales remained stagnant, painting a worrisome picture for the industry.

In contrast to pending home sales, new home sales experienced a significant decline of 12.2% in November. This drop may reflect a combination of factors, such as exhausted incentives offered by home builders or consumer dissatisfaction with the value they are receiving for their money.

The overall downward trend in pending and new home sales suggests challenges ahead for the U.S. housing market. Builders and real estate professionals will need to carefully navigate these difficult conditions and explore innovative strategies to attract buyers and stimulate demand.

As the market heads into the new year, industry experts will closely monitor any developments and await potential measures that could address the underlying issues impacting pending home and new home sales across the nation.