The National Association of Realtors today put out its monthly report on pending home sales, or the rate of contract signings to buy a previously owned home, and the data was better than expected.
The NAR’s pending home sales index rose 3.5 percent to 109.1 last month, the highest level in seven months. January’s reading was revised to show a 3.0 percent decrease, which was even worse than initially reported. Nonetheless, the 3.5 percent jump is more than double what most economists had projected.
But in its release, the NAR’ chief economist, Lawrence Yun, made reference to last month’s slump in sales of existing homes, which was accompanied by a home price appreciation lessened to 4.4 percent. That’s “still above wage growth but certainly more favorable than the 8.1 percent annual increase in January,” the NAR stated.
This illustrates housing’s biggest obstacle lately: Very low inventories of homes pushing prices beyond the reach of young buyers and others in the market.
“Any further moderation in prices would be a welcome development this spring,” Yun said. “Particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition.”
The national median existing-home price for all of this year is expected to increase between 4 and 5 percent. In 2015, existing-home sales increased 6.3 percent and prices rose 6.8 percent.
Yun’s outlook: “Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”