Pending home sales registered a second month of growth in January
We’ve seen falling home prices and lower mortgage rates for a while now, and those inputs are finally producing some good news. For the second month in a row, pending home sales activity was up in January, rising 8.1% from the month before, according to the Pending Home Sale Index put out by the National Association of Realtors®.
“Buyers responded to better affordability from falling mortgage rates in December and January,” said Lawrence Yun, chief economist at NAR. Mid
Growth across all four regions
All four regions saw growth in contract activity to start the new year, but the West and the South led the way. Said NAR’s Yun: “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.”
- Northeast: up 6.0% to 68.7, down 19.8% from January 2022
- Midwest: up 7.9% to 83.3, down 21.1% from January 2022
- South: up 8.3% to 99.2, down 24.7% from January 2022
- West: up 10.1% to 66.2, down 29.3% from January 2022
Despite the encouraging signs over the last month, these numbers are still down from January 2022 and historically lower than the benchmark index of 100, which is equal to the level of activity in 2001.
January’s pending home sales results were definitely buoyed by interest rates that dipped to right around 6% for part of the month. Mortgage rates have risen since then as the economy struggles to get inflation under control.
That said, Yun expects fewer home sales this year than in 2022. “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.”
With the housing market changing so quickly, even the trends seen in this report are dated. That’s why it’s best to talk with an expert loan officer, who will help you understand the latest breaking news about the housing market and find ways to make the most of the current environment.