US Pending Home Sales Dip in January
Pending home sales in the United States decreased by 0.8% in January compared to the previous month, according to a report from the National Association of REALTORS®. On a year-over-year basis, sales under contract were down 0.4%.
- The January dip in pending home sales was unexpected by economists, who had forecasted a 2.5% increase. This follows a revised 7.4% plunge in December. - Regionally, the decline was most pronounced in the Northeast, which saw a 5.7% decrease in contract signings compared to the previous month and an 8.3% drop year-over-year. The South also experienced a monthly decrease of 4.5%. - In contrast, the Midwest and the West saw month-over-month increases in pending sales of 5.0% and 4.3%, respectively. On a yearly basis, the South and West saw slight gains, while the Northeast and Midwest saw declines. - Despite the overall slowdown, several metropolitan areas experienced significant year-over-year gains in pending sales, including Phoenix (+11.8%), Boston (+10.7%), and Charlotte (+10.7%). - According to NAR Chief Economist Lawrence Yun, improving affordability has not yet translated into more buying activity. He notes that while an additional 5.5 million households can now qualify for a mortgage with rates near 6% compared to a year ago, a lack of housing supply could push prices up if these potential buyers enter the market. - The Pending Home Sales Index stood at 70.9 in January, with an index of 100 being equal to the level of contract activity in 2001. - Some economists suggest that severe winter weather in January may have played a role in the subdued housing activity. - The dip in pending home sales, which are a leading indicator of housing activity, points to a slower start for existing-home sales in the early part of the year.
