Pending home sales in January surged to the highest level since August 2013 after a steep drop last month, according to the National Association of Realtors. All major regions except for the Midwest saw gains in activity in January thanks to improved buyer demand at the beginning of 2015. The Pending Home Sales Index, a forward-looking indicator based on contract signings, grew 1.7% to 104.2 in January, from an upwardly revised 102.5 in December, and is now 8.4% above January 2014 (96.1).
This marks the fifth consecutive month of year-over-year gains with each month accelerating the previous month’s gain. Lawrence Yun, NAR chief economist, says that for the most part buyers in January were able to overcome tight supply to sign contracts at a pace that highlights the underlying demand that exists in today’s market.
“Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” he said. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”