A gauge of future U.S. home inched up in November and looks poised to close out the year on a high note.
The National Association of Realtors on Wednesday said its pending home sales index, which tracks contract signings for previously-owned homes, rose 0.2% in November to 109.5 from the previous month and 0.8% from a year earlier. Economists surveyed by The Wall Street Journal had expected no change between October and November.
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November's reading was the highest since June.
"The housing market is closing the year on a stronger note than earlier this summer, backed by solid job creation and an economy that has kicked into a higher gear," said NAR chief economist Lawrence Yun.
But the new tax law could put a damper on home sales in 2018.
"Sales do have room for growth in most areas, but nationally, overall activity could be slightly negative," Mr. Yun said. "Markets with high home prices and property taxes will likely feel some impact from the reduced tax benefits of owning a home."
Mr. Yun said he expects existing-home sales to end the year up 1.7% from 2016 but to decline 0.4% in 2018. Prices are expected to end the year up 6% but to rise more modestly next year, by around 2%.
The tax law limits the amount of state and local taxes--including real estate taxes--that homeowners can deduct from their federal taxes, weakening the tax benefits of homeownership, particularly in high-cost areas.
News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.
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(END) Dow Jones Newswires
December 27, 2017 10:31 ET (15:31 GMT)