The housing market's ‘Godfather’ moment

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Published Date 1/6/2025

“Leave the gun. Take the cannoli,” is a memorable line used by the character Clemenza in The Godfather. Sometimes it’s the little things when all is said and done, and in real estate reality what might seem like a small thing isn’t. Such as the latest sign of improvement in pending home sales.

Pending home sales is a gauge of future home sales based on contract signings, and Realtor Magazine’s Melissa Dittman Tracey tells us that the figure rose 2.2% month over month in November, citing the National Association of REALTORS® reports. “Marking the fourth consecutive month of increases, contract signings are up nearly 7% from a year ago and are at their highest level since February 2023,” says Tracey.

“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” says NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”

Recent housing indicators that have painted a healthier picture of the market include existing home sales jumping 5% in November, the median home price climbing 4.7% year over year, the number of existing homes on the market being up nearly 18% from a year ago, and new-home construction for single-family homes rising 7% annually in November.

Still, “some markets will outperform, driven primarily by local job gains and the flow of new inventory supply,” Yun says.

Tracey also reports that contract signings were up annually in all four major regions of the U.S. in November. Three posted a monthly uptick, with the South winning the race (pending home sales up 5.2%). The Northeast was the only region to post a decline, with pending home sales falling 1.3% month over month. However, contract signings are still up in the region by nearly 6% compared to a year ago, NAR’s report shows.

All good signs that there is no need to “go to the mattresses” as the new year begins. And that those cannoli are beginning to taste better and better.

Realtor, TBWS

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