Hope may not be a strategy, but giving up hope might be.

So suggested the amusing first line in one mainstream financial media outlet’s coverage of pending home sales data covering November, when contract activity managed a fourth consecutive monthly gain.

I’d say that came despite still-elevated rates, but the opposite might be the case: Buyers might’ve simply given up on lower rates, deciding instead to pull the trigger knowing there’s no point in waiting around — so, in some sense they’re buying because of still-elevated rates. That’s the “give up hope” strategy.

The 2.2% uptick for November pushed the NAR’s index to the highest since February of 2023.

Would-be homebuyers, NAR chief economist Lawrence Yun said, “appeared to have recalibrated expectations regarding mortgage rates.”

Indeed. After a while, you acclimate to your circumstances, fatalism sets in or a little bit of both. And it’s been more than two years since buyers saw a five-handle mortgage rate.

The Fed this month tipped fewer in the way of rate cuts for 2025, and 10-year US Treasury yields are up more than 40bps in December, which was shaping up to be the worst month for the US long-end since September of 2023, during the last term premium scare.

And, so, buyers are effectively pinning their hopes on improving inventories. That may or may not be a good bet. Although existing homeowners will still be reluctant to swap a three- or four-handle mortgage for a six-handle on a trade-up, they have a lot of home equity to play with when it comes to paying cash or making very large downpayments in the event they want to move. That could help thaw the resale market.

According to the latest update from Redfin, housing supply’s increasing, but only because homes are sitting unsold for longer. As Lily Katz wrote in her latest, more than half of listed homes were on the market for 60 days or more in November, the highest share in five years. The result: A 12% increase in housing supply. Seasonally adjusted, active listings were the highest last month since November of 2020.

Additional color from the linked Redfin piece offered a more granular explanation. “A lot of listings on the market are either stale or uninhabitable,” one agent said, adding that fairly-priced homes in good condition are still “flying off the market in three to five days.”