Lawrence Yun, Chief Economist at National Association of Realtors (NAR) says he had expected an increase in January home sales. “A change in Federal Reserve policy and the reopening of the government were very beneficial to the market,” Yun said. He pointed out that positive pending home sales figures in January will likely continue as income is rising faster than home prices in many areas and mortgage rates look to remain steady. “Furthermore, job creation will help lift home buying,” he added.
According to the latest Pending Home Sales Index (PHSI) from NAR, pending home sales rebounded strongly in January with all four major regions recording growth last month. The largest surge in pending home sales was reflective in the South. The Index revealed an increase of 4.6 percent to 103.2 in January, up from 98.7 in December. Contract signings on an annual basis, however, declined by 2.3 percent—making this the thirteenth straight month of annual decreases.
Yun also noted that higher rates discouraged many would-be buyers in 2018. “Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers,” he said.
The index also found year-over-year increases in active listings in Denver, Colorado, Seattle and Washington to name a few. Nashville, Tennessee saw the largest increase in active listings in January compared to a year ago. In 2019, Yun forecasts existing home sales to be around 5.28 million—dropping 1.1 percent from 2018 (5.34 million). The national median existing-home price this year is expected to increase by around 2.2 percent. Data from the PHSI indicated that Northeast rose 1.6 percent to 94.0 in January, and is now 7.6 percent above a year ago. In the Midwest, the index rose 2.8 percent to 100.2 in January, 0.3 percent lower than January 2018.