Improved buyer demand at the beginning of the year pushed pending home sales in January to their highest level since August 2013, according to the National Association of Realtors. All sectors of the country except the Midwest saw gains in activity in January.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 8.4% this January compared January of last year. This marks the fifth consecutive month of year-over-year gains.
Lawrence Yun, the chief economist for the National Association of Realtors said, “ 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, The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”
Yun also points to more favorable conditions for traditional buyers entering the market. All-cash sales and sales to investors are both down from a year ago, creating less competition and some relief for buyers who still face the challenge of limited homes available for sale.