Pending Home Sales Are Increasing

According to a recent report from the National Association of Realtors (NAR) pending home sales have been increasing for a second month. Although the number of sales is lower 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 predicts that the economy will remain strong and add more jobs this year and next with 30 year fixed mortgage rates lowering to just over 6% this year and then to the mid 5’s next year. Yun anticipates that for 2023 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 forecasts that home prices will stay stable compared to last year in most regions. It estimates that we will see more significant price increases resume come 2024.

Regional Breakdown

The Northeast pending home sales increased by 6.0% this January from the prior month. The Midwest grew by 7.9% for the same time frame. 

The South increased 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.