Pending home sales rebounded 5.2% in January, following December’s decline that was the largest in almost a decade, according to a report Thursday from the National Association of Realtors.
“This month’s solid activity – the second-highest monthly figure in over two years – is due to the good economic backdrop and exceptionally low mortgage rates,” said Lawrence Yun, NAR’s chief economist.
While contract signings are up, Yun warned the housing market is still in need of more supply.
“We are still lacking in inventory,” Yun said, noting December’s and January’s combined supply was at the lowest level since 1999. “Inventory availability will be the key to consistent future gains.”
And Yun may be right as year-over-year increases display a strong desire for homeownership from the nation’s homebuyers.
According to the report, markets drawing some of the most significant buyer attention include Fort Wayne, Indiana; San Francisco; Sacramento, California; Lafayette, Indiana; and San Jose, California.
With housing starts hovering at 1.6 million in December and January, along with the favorable mortgage rates, 2020 has so far presented itself to be a positive sales climate, Yun said.
“Moreover, the latest stock market correction could provide exceptional, even lower mortgage rates for a few weeks, and that would help bring about a noticeable upturn in the coming months,” Yun said.
During January, all U.S. regions but the West saw an increase in pending home sales.
According to the report, the Northeast grew 1.3% and the Midwest jumped 7.3%. Pending sales in the South rose 8.7% and in the West they declined by 1.1%.
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