According to a recent release from the National Association of Realtors (NAR) pending home sales have been on the rise for the second consecutive month. Regardless of the number of transactions being lower than last year at this time, contract signings have increased 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 remain healthy and add jobs both this year and next with 30 year fixed mortgages lowering rates to just over 6% this year and into the mid 5’s next. Yun expects that this year we will still see 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 areas. NAR also estimates that we will see larger price increases resume come 2024.
Breakdown By Region
The Northeast pending home sales increased by 6.0% this January from the month before. The Midwest grew by 7.9% for the same time period.
The South region increased by 8.3% while the West jumped 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.
All in all these signs show good strength and positivity in the marketplace.