(Reuters). – The unexpected fall in U.S. contracts to purchase previously-owned houses was due to a lack of housing stock, high prices, and the risk that Omicron virus-related coronavirus outbreaks pose to the U.S. housing markets heading into 2022.

According to the National Association of Realtors, its Pending Home Sales Index (based on contracts signed) fell 2.2% to 122.4. All four regions saw lower pending home sales.

According to Reuters polling, economists had predicted that November’s contract sales, which are usually final after a few months, would increase 0.5%.

The year-over-year decline in home sales was 2.7% for November. Due to a shortage of inventory, home prices have seen double-digit increases.

Lawrence Yun (NAR chief economist) stated that there was less home-sales activity this year. This could be due to a lower housing supply and buyers being more cautious about their home values. “While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.”

As a result of the outbreak of coronavirus, housing demand soared as people moved away from urban centers and into suburbs to find larger homes that would allow them to work remotely and study online.

Due to limited supply, prices became prohibitively high in the first six months of this year. This caused a market cooling. The rollout of vaccines also encouraged optimism about people being able to go back to work in office buildings in cities and in other business areas.

However, activity has rebounded in the last few months. In November, there were 7.2 million homes sold in the United States. This is the most since January.

However, COVID-19 has changed to new forms – Omicron, and Delta – forcing some employers to rethink their return-to-work plans. According to Reuters, the U.S. coronavirus cases have risen to a new record within the past week. This surpasses the earlier peak that was set in early 2011.

Yun of NAR stated that Omicron is the transmissible virus driving the recent surge in infection rates. This poses a threat to the performance of the housing market, since buyers and sellers have been left out and construction has been delayed.