Falling mortgage rates didn’t do much to help pending sales of existing homes in November, as they stayed at historically low levels in the latest data.

The National Association of Realtors (NAR) Pending Home Sales Index (PHSI) didn’t move from October’s reading, which neared a low point in the index’s 22-year history. The index, a forward-looking indicator of home sales that is based on contract signings, was lower by 5.2% from November 2022 levels.

Economists expected easing mortgage rates would help increase contract signings, and they had expected a 1% increase.

Decades-high mortgage rates have played a role in slow sales in the previous month. But a declining mortgage rate in November wasn’t enough to motivate prospective home buyers to enter an increasingly challenging market that has shown housing costs remaining high.

"Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings," said Lawrence Yun, NAR chief economist.

Housing inventory is an issue for home sales, as homebuyers continue to “lock in” low mortgage rates and stay put, leaving fewer properties up for sale. 

“Buyers over the last year have gravitated toward new construction as existing home supply has remained limited and builders are willing to incentivize purchases with lower rates,” Realtor.com Chief Economist Danielle Hale said.