Pending home sales jumped in January, the National Association of Realtors (NAR) reported Friday, a sign that the housing market could perk up in the early spring despite several mixed reports this week on the condition of the housing recovery.
NAR’s Pending Home Sales Index, a forward looking indicator that reflects signed contracts, climbed 1.7 percent in the month to 104.2. The Index was up 8.4 percent year over year in January.
Lawrence Yun, NAR’s chief economist, said during a webcast that the indicator shows “good, positive signs” of future closing activity. He also noted that consumer traffic on realtor.com was up. An index that tracks the number of opened locked boxes at homes for sale has also been rising – a sign that foot traffic is up.
“Even with the snowy conditions in the many parts of the country, this is implying there is a pent-up demand wanting to come to the market, and it was a convincingly higher figure than one year ago,” Yun said.
NAR is forecasting 600,000 new home sales and 5.3 million existing home sales in 2015, with prices increasing by 4 to 5 percent.
“Broadly speaking, it will be a healthy housing recovery year,” Yun said.
This latest indicator, however, comes after several mixed reports this week.
NAR reported on Monday that existing home sales fell in January to a nine-month low. Total sales declined 4.9 percent to a seasonally adjusted rate of 4.82 million homes in January, from 5.07 million in December, the trade group said in a news release. Total sales are roughly 3 percent higher year-over-year, however. The inventory of new homes was estimated at 218,000, which represents a still-tight supply of about 5.4 months.
Yun said during the webcast on Friday that those sales numbers were “disappointing.” He was also concerned about tight inventories and prices, noting that home prices are rising more than twice as fast as incomes.
“We cannot have this mismatch of prices easily outpacing people’s income,” Yun said.
On Tuesday, David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones said the housing recovery was faltering. noting that new construction and sales of new homes “remain weak.”
Home prices were essentially flat in December. Year-over-year, however, prices were up more than 4 percent, according S&P/Case-Shiller Home Price Index.
ITS Integrity Title Solutions, March 3, 2015