The National Association of Realtors® Pending Home Sales Index increased 4.6% to 103.2 in January, up from 98.7 in December, the Realtors reported Wednesday. Year-over-year contract signings, however, declined 2.3%, making this the thirteenth straight month of annual decreases.
The PHSI in the Northeast rose 1.6% to 94.0 in January, and is now 7.6% above a year ago. In the Midwest, the index rose 2.8% to 100.2 in January, 0.3% lower than January 2018.
Pending home sales in the South jumped 8.9% to an index of 119.8 in January, which is 3.1% lower than this time last year. The index in the West increased 0.3% in January to 87.3 and fell 10.1% below a year ago.
Lawrence Yun, NAR chief economist, expected the. "A change in Federal Reserve policy and the reopening of the government were very beneficial to the market," he said.
Yun also said higher rates discouraged many would-be buyers in 2018. "Home buyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers."
Additionally, Yun noted year-over-year increases in active listings from data at realtor.com®to illustrate the potential rise in inventory. Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Los Angeles-Long Beach-Anaheim, and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in January compared to a year ago.
Yun said positive pending home sales figures in January will likely continue. "Income is rising faster than home prices in many areas and mortgage rates look to remain steady. Furthermore, job creation will help lift home buying."
In 2019, Yun forecasts existing-home sales to be around 5.28 million – down 1.1% from 2018 (5.34 million). The national median existing-home price this year is expected to increase around 2.2%. In 2018, existing sales declined 3.1% and prices rose 4.9%.