Pending home sales in the U.S. fell to the lowest level in almost a year in November as mortgage rates surged, the National Association of Realtors said. The sales decline follows the slight increase in October.
The association's Pending Home Sales Index dropped 2.5% to 107.3 in November from 110.0 in October and is 0.4% lower than its November 2015 level.
The last time the index reading was so low was in January, when it was 105.4.
National Association of Realtors chief economist Lawrence Yun said ongoing supply shortages also factored into the sales decline.
"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," Yun said in a release.
The Pending Home Sales Index in the Northeast edged up 0.6% to 97.5 in November, representing a 5.7% gain compared to year-ago levels. In the Midwest, the index fell 2.5% to 103.5 and was 2.4% lower than November 2015 levels.
The index declined 1.2% in the South to 118.7 and was 1.3% lower than year-ago levels. In the West, the index dropped 6.7% to 101.0 in November and was 1.0% lower than in October 2015.
Yun expects existing sales to close 2016 at a pace of roughly 5.42 million, eclipsing the 2015 level of 5.25 million and marking the highest figure since 2006, when the total was 6.48 million.