Pending home sales reversed course in January, rebounding in all four major regions, according to the latest report from the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, moved forward 4.6% in January to 103.2, up from 98.7 in December. However, year over year, contract signings dropped 2.3%.
NAR Chief Economist Lawrence Yun said a change in Federal Reserve policy and the reopening of the government were very beneficial to the market.
In fact, all major regions saw a month-over-month increase in December.
That being said, of the four major regions, three markets experienced a decline compared to 2018, while the Northeast slightly climbed.
According to Yun, this is because higher rates discouraged many would-be buyers last year.
“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
The PHSI in the Northeast increased 1.6% to 94 in January and is 7.6% higher than 2018. The Midwest index rose 2.8% to 100.2% but is still 0.3% lower than this period in 2018.
Pending home sales in the South spiked 8.9% to 119.8, decreasing 3.1% below 2018. Lastly, the index in the West rose 0.3% to 87.3, but dropped 10.1% from 2018.
Notably, Yun cited year-over-year increases in active listings in certain pockets.
Cities that experienced the largest increase in listings in December 2018 included Denver-Aurora-Lakewood, Colorado; Seattle-Tacoma-Bellevue, Washington; San Francisco-Oakland-Hayward, California; San Diego-Carlsbad, California; Los Angeles-Long Beach-Anaheim, California and Nashville-Davidson-Murfreesboro-Franklin, Tennessee, according to Realtor.com.
Furthermore, Yun said positive pending home sales figures in January will likely continue.
As for Yun’s 2019 predictions, he forecasts existing-home sales will fall 1.1% to around 5.28 million, and the national median existing-home price to increase around 2.2%.