What a difference a month makes! Pending home sales in the US rebounded +4.6% in January 2019 from December 2018, according to a monthly survey by the National Association of REALTORS®.
Though January 2019 pending sales contracts were still down-2.3% compared with such contracts in January 2018, this news is good news for the housing market.
In a piece by Diane Olick for CNBC, https://www.cnbc.com/2019/02/27/pending-home-sales-rebound-4point6-percent-in-january.html
Lawrence Yun, chief economist with NAR, said, “A change in Federal Reserve policy (softening and even retracting interest rate hikes) and reopening the government (after its partial shutdown) were very beneficial to the market. Homebuyers are now returning and taking advantage of lower rates (4.43% according to the Mortgage Daily News), while the boost in inventory is also providing more choices for consumers.”
Regionally, January 2019 pending home sales looked like this:
- NE – +1.6% monthly and +7.6% above one year ago
- NW – +2.8% monthly and -0.3% lower one year ago
- S – +8.9% monthly and -3.1% lower one year ago***
- W – +0.3% monthly and -10.1% lower one year ago***
Closed sales of existing homes were lower in January 2019 than in December 2018 but those sales were closed during a time (November and December) when interest rates were higher, though starting to fall, than the current rates.
Some agents, according to Olick, reported increasing demand due to the lower rates but a lingering “hesitancy in the overall market.”
In an interview on CNBC’s Power Lunch, Redfin’s CEO Glenn Kelman said, “The buyers and sellers are in this dance right now where it’s a little harder to put deals together because nobody’s certain where the market is going to land. It’s a little bit better than it was in Q4. We’re seeing stronger buyer demand, but it’s not as if people are willing to pay any price to get a home, which is what we saw at the beginning of 2018 and for the past four years before that.”