Mortgage Daily

Published On: February 27, 2015

The number of U.S. residential properties that were under contract in January climbed to the highest level in 17 months — ending a string of negative reports.

During the first month of this year, the Pending Home Sales Index, an indicator of upcoming home sales that is based on contract signings, was 104.2.

Pending home sales in January turned out to be higher than any month since August 2013, a period when the revised index stood at 107.6.

The National Association of Realtors, which reported the index, said strengthened demand from prospective buyers drove the improvement.

The positive report follows less optimistic metrics like January’s new home sales, which slipped from the prior month; existing home sales, which last month declined 4.9 percent from December; and new home construction, which was off 2 percent in January.

In addition,
the pace of home appreciation slowed in December according to the S&P/Case-Shiller Home Price 20-City Composite Index.

In
December of last year, the Pending Home Sales Index was a revised 102.5. The month-earlier index was originally reported at 100.7.

In January 2014, the index landed at 96.1, revised up from the 95.0 level originally reported. NAR said year-over-year gains have been made for five consecutive months.

“The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth,” NAR Chief Economist Lawrence Yun explained in the report.

Yun said modest sales gains are expected in Spring.

By region, the South’s 3.2 percent increase from December was the highest.
The Midwest saw the only decline: 0.7 percent.

The trade group forecasts that existing home sales will total 5.26 million this year, 6.4 percent more than in 2014.

Median home prices are expected to rise 5 percent in 2015, off from the 5.7 percent rate in 2014.

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