NEW YORK ( TheStreet) -- Contracts signed to purchase previously owned homes edged up slightly in November after declining for five months in a row.
The National Association of Realtors' Pending Home Sales Index rose 0.2% to 102.1 from a downwardly revised reading of 101.5 in October. Year-over-year, the index is down 1.6%.
Economists expected the index to rise 1.5% according to consensus estimates from Bloomberg.
Pending Home Sales, which reflects signed contracts as opposed to closings, is considered a useful predictor of existing home sales. Contracts are typically signed about one to two months ahead of a closed transaction.The latest data confirms that the market is flattening after rising at a rapid pace earlier in the year, according to Lawrence Yun, chief economist at the NAR. "We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014," he said. "Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years." Contract activity has slowed recently as rising mortgage rates has slowed demand for homes. Limited inventory of homes available for sale has also stalled activity. Still, total existing home sales is likely to reach 5.1 million in 2013, a 10% rise over 2012, according to NAR. Sales are expected to stay level in 2014, but rise to 5.3 million in 2015. The national median existing-home price will be close to $197,300 in 2013, up nearly 12% from 2012. Gains are expected to moderate to 5% to 5.5% in 2014, and grow another 4% in 2015. Existing home sales are now at levels close to their pre-bubble normal. New home sales on the other hand are still well below normal and are expected to see strong growth in 2014. -- Written by Shanthi Bharatwaj in New York.