Pending home sales rebounded strongly in January, according to the National Association of Realtors® (NAR). All four major regions saw month-to-month growth last month, including the largest surge in the South, an area that includes Florida.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.6 percent to 103.2 in January, up from 98.7 in December. Year-over-year contract signings, however, declined 2.3 percent, making January the thirteenth straight month of annual decreases.
Lawrence Yun, NAR chief economist, says he expected an increase in January home sales because a “change in Federal Reserve policy and the reopening of the government were very beneficial to the market.”
Of the four major regions, three areas experienced a decline in a year-to-year comparison, however. Only the Northeast enjoyed a slight growth spurt.
Yun says 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.”
Additionally, Yun says the inventory of for-sale homes has risen, which bodes well for increased pending sales going forward, and 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,” he says.” Furthermore, job creation will help lift home buying.”
January pending home sales regional breakdown
In 2019, Yun forecasts existing-home sales will be around 5.28 million – down 1.1 percent from 2018 (5.34 million). The national median existing-home price this year is expected to increase around 2.2 percent. In 2018, existing sales declined 3.1 percent and prices rose 4.9 percent.
Pending sales in the Northeast rose 1.6 percent to 94.0 in January and are 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.
Pending home sales in the South jumped 8.9 percent to an index of 119.8 in January, which is 3.1 percent lower than this time last year. The index in the West increased 0.3 percent in January to 87.3 and fell 10.1 percent below a year ago.
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