Pending home sales reversed course in January, rebounding in all four major regions, according to the latest report from the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, moved forward 4.6% in January to 103.2, up from 98.7 in December. However, year over year, contract signings dropped 2.3%.
NAR Chief Economist Lawrence Yun said a change in Federal Reserve policy and the reopening of the government were very beneficial to the market.
In fact, all major regions saw a month-over-month increase in December.
That being said, of the four major regions, three markets experienced a decline compared to 2018, while the Northeast slightly climbed.
According to Yun, this is because higher rates discouraged many would-be buyers last year.
“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
The PHSI in the Northeast increased 1.6% to 94 in January and is 7.6% higher than 2018. The Midwest index rose 2.8% to 100.2% but is still 0.3% lower than this period in 2018.
Pending home sales in the South spiked 8.9% to 119.8, decreasing 3.1% below 2018. Lastly, the index in the West rose 0.3% to 87.3, but dropped 10.1% from 2018.
Notably, Yun cited year-over-year increases in active listings in certain pockets.
Cities that experienced the largest increase in listings in December 2018 included Denver-Aurora-Lakewood, Colorado; Seattle-Tacoma-Bellevue, Washington; San Francisco-Oakland-Hayward, California; San Diego-Carlsbad, California; Los Angeles-Long Beach-Anaheim, California and Nashville-Davidson-Murfreesboro-Franklin, Tennessee, according to Realtor.com.
Furthermore, Yun said positive pending home sales figures in January will likely continue.
“Income is rising faster than home prices in many areas and mortgage rates look to remain steady,” Yun continued. “Furthermore, job creation will help lift home buying.”
As for Yun’s 2019 predictions, he forecasts existing-home sales will fall 1.1% to around 5.28 million, and the national median existing-home price to increase around 2.2%.
