Pending Home Sales Are On The Rise

According to a recent report from the National Association of Realtors (NAR) pending home sales have increased for the second consecutive month. Despite the number of transactions being lower than last year at this time, contract signings have increased by 8.1% in January.

“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.

NAR predicts that the economy will hold strong and add jobs this year and next with 30 year fixed mortgages going to just over 6% this year and to the mid 5’s next year. Yun expects that this year we will still have lower year-over-year sales before rebounding next year. 

“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Yun said. “But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”

NAR also expects that home prices will stabilize compared to last year in most areas. It estimates that we will see larger price increases resume come 2024.

Regional Breakdown

The Northeast pending home sales went up by 6.0% this January from the month before. The Midwest increased by 7.9% for the same time frame. 

The South surged by 8.3% with the West jumping the most by 10.1% in January from the month before. “An extra bump occurred in the West region because of lower home prices, while gains in the South were due to stronger job growth in that region,” Yun added.

All in all these signs show good strength and positivity for the real estate market.