Pending Home Sales Are Increasing

According to a recent release from the National Association of Realtors (NAR) pending home sales have been increasing for the second month in a row. Although the number of transactions is fewer than last year at this time, contract signings have been up 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 expects that the economy will hold strong and add jobs this year and in 2024 with 30 year fixed mortgages going to just over 6% this year and to the mid 5’s next year. Yun feels that this year we will still experience 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 be stable compared to last year in most areas. They estimate that we will experience bigger price increases once we enter 2024.

Regional Breakdown

The Northeast number of pending home sales increased by 6.0% this January from the month before while the Midwest increased by 7.9% for the same time period. 

The South went up by 8.3% with the West surging 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.

Collectively these signs show good strength and positivity in the marketplace.