Pending home sales rise in January
All four major U.S. regions saw growth last month.
Pending home sales rebounded in January, according to the latest report from the National Association of Realtors (NAR).
All four major U.S. regions saw growth last month, including the largest surge in the South. But with the exception of the Northeast, three U.S. regions saw a decline when comparing year-over-year pending home sales.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, increased 4.6% to 103.2 in January, up from 98.7 in December.
Year-over-year contract signings, however, declined 2.3%, making this the 13th-straight month of annual decreases.
“A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” said Lawrence Yun, chief economist of the NAR.
There also appears to be good news for the industry when it comes to potential buyers. “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers,” Yun noted.
In 2019, Yun forecasts existing-home sales to be around 5.28 million – down 1.1% percent from 2018 and 5.34 million. The national median existing-home price this year is expected to increase around 2.2%. In 2018, existing sales declined 3.1% while prices rose 4.9%, according to the NAR.
The PHSI in the Northeast rose 1.6% to 94 in January, and is now 7.6% above a year ago. In the Midwest, the index rose 2.8% to 100.2 in January, 0.3% lower than January 2018.
Pending home sales in the South jumped 8.9% to an index of 119.8 in January, which is 3.1% lower than this time last year. The index in the West increased 0.3% in January to 87.3 and fell 10.1% below a year ago.
Although the NAR has forecast a fall-off in 2019, Yun said that he sees positive trends that could translate into a boost for sales.
“Income is rising faster than home prices in many areas and mortgage rates look to remain steady,” he said. “Furthermore, job creation will help lift home buying.”
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