After a sluggish showing last month and for much of 2019, pending home sales are surging in 2020.
The National Association of Realtors Pending-Homes Sales Index rose 5.2 percent between December and January, according to the latest data released on Thursday. Evaluating total contract signings on existing homes that have not yet been closed, the index is also up 5.7 percent year-over-year — a significant improvement over the large drop observed in the previous month.
“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,” NAR Chief Economist Lawrence Yun said in a prepared statement.
Regionally, the West saw the only area to see a drop in pending sales — but at 1.1 percent, the decline is still modest. The largest spike in sales took place in the South at 8.7 percent while the Midwest and the Northeast also saw growth at 7.3 and 1.2 percent, respectively.
“With housing starts hovering at 1.6 million in December and January, along with the favorable mortgage rates, among other factors, 2020 has so far presented a very 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.”
