Pending Home Sales Fell in January
What happened
Pending home sales in the U.S. decreased by 0.8% in January compared to the previous month, according to the National Association of REALTORS. The report also showed a 0.4% decline in sales under contract compared to the same period last year. These figures provide an indicator of future existing-home sales.
Why it matters
- The West was one of only two regions to see a month-over-month increase in contract signings, with a 4.3% rise in January. The other region to see an increase was the Midwest, with a 5.0% jump. - Contract signings decreased in the Northeast and the South, with declines of 5.7% and 4.5% respectively from the previous month. - Despite the national decrease, the San Francisco-Oakland-Fremont metro area was among the top 10 markets with the largest year-over-year gains in pending home sales, showing an 8.9% increase. - NAR Chief Economist Lawrence Yun noted that with mortgage rates nearing 6%, an additional 5.5 million households could qualify for a mortgage compared to a year ago. He estimates about 10% of these households could enter the market. - The Pending Home Sales Index registered a reading of 70.9 in January; an index of 100 is equivalent to the level of contract activity in 2001. - Affordability issues and economic uncertainty are considered contributing factors to the sluggish national numbers, according to some economists. - The San Francisco housing market, specifically, is experiencing extremely low inventory, with just 93 single-family homes for sale in December, creating a deeply entrenched seller's market.
Key numbers
- decreased by 0.8% in January compared to the previous month, according to the National Association of REALTORS.
- The report also showed a 0.4% decline in sales under contract compared to the same period last year.
- - The West was one of only two regions to see a month-over-month increase in contract signings, with a 4.3% rise in January.
- The other region to see an increase was the Midwest, with a 5.0% jump.
What happens next
- NAR Chief Economist Lawrence Yun noted that with mortgage rates nearing 6%, an additional 5.5 million households could qualify for a mortgage compared to a year ago.
- He estimates about 10% of these households could enter the market.
Quick answers
What happened in Pending Home Sales Fell in January?
Pending home sales in the U.S. decreased by 0.8% in January compared to the previous month, according to the National Association of REALTORS. The report also showed a 0.4% decline in sales under contract compared to the same period last year. These figures provide an indicator of future existing-home sales.
Why does Pending Home Sales Fell in January matter?
The West was one of only two regions to see a month-over-month increase in contract signings, with a 4.3% rise in January. The other region to see an increase was the Midwest, with a 5.0% jump. Contract signings decreased in the Northeast and the South, with declines of 5.7% and 4.5% respectively from the previous month. Despite the national decrease, the San Francisco-Oakland-Fremont metro area was among the top 10 markets with the largest year-over-year gains in pending home sales, showing an 8.9% increase. NAR Chief Economist Lawrence Yun noted that with mortgage rates nearing 6%, an additional 5.5 million households could qualify for a mortgage compared to a year ago. He estimates about 10% of these households could enter the market. The Pending Home Sales Index registered a reading of 70.9 in January; an index of 100 is equivalent to the level of contract activity in 2001. Affordability issues and economic uncertainty are considered contributing factors to the sluggish national numbers, according to some economists. The San Francisco housing market, specifically, is experiencing extremely low inventory, with just 93 single-family homes for sale in December, creating a deeply entrenched seller's market.
