Housing markets

The report showed the gauge of prospective buyer traffic also climbed for the first time in five months, while a measure of expected sales reached a three-month high.

The upcoming election exposes the Federal Reserve to heightened criticism for its actions, said Brookings Institution senior fellow Sarah Binder.

Pending sales also increased in November as mortgage rates began to decline during the month, but cancellations reached a new record during the month.

The government is moving forward with a catalog of pre-approved home designs to reduce the cost and time it takes to build housing. The idea dates back to the 1940s when thousands of soldiers returned from the Second World War and needed a place to live.

But despite the pullbacks in home values this fall, a panel of economists anticipate they will rise over the next year.

Toll Brothers Inc. stock rose as the homebuilder's executives pointed to "solid" demand in recent weeks as mortgage rates pulled back from two-decade highs. 

Heightened government-backed activity also helped bring the average loan size down to its lowest mark in 2023, with purchase amounts falling below $400,000 for the first time since January, the Mortgage Bankers Association found.

While Fitch and CoreLogic predict home prices will rise next year, Redfin is forecasting a 1% drop in the second and third quarters.

Only 62% of likely purchasers surveyed in October were waiting to act in expectations of declines, down from 85% in April.

California, Midwest and Northeast cities are poised to see the greatest combined rise in sales and home values, but some affordability relief will also emerge nationwide in the next 12 months, Realtor.com said.