The National Association of REALTORS® (NAR) reported twenty-one consecutive months of growth in pending contracts over the previous year according to the release of January’s Pending Home Sales Index. Consumer confidence is clearly on the rise, along with home values nationwide. The trend of rising prices and decreasing inventory has been a familiar pattern.
More than 70 percent of metropolitan areas qualified as improving markets according to the National Association of Home Builders latest Improving Markets Index. It’s notable that the last time the Pending Home Sales Index reached this level was in April 2010, prior to the expiration of the tax credit for home buyers. While the Pending Home Sales Index doesn’t reflect closed sales, the uptick in pending contracts indicates consumer willingness to invest in the real estate market. Investors and first-time homeowners alike are making moves and finally getting off the proverbial fence.
The NAR report noted that all regions across the country showed gains in pending sales. NAR economists project 5 million existing home sales in 2013. Lawrence Yun, NAR chief economist , outlined key contributing factors Home affordability and job growth have combined to “unleash” pent-up demand, the resulting decreased housing inventory has shifted us to a to sellers market in much of the country — creating the strongest price growth in seven years.
The Pending Home Sales Index indicated regional growth, led by the Northeast with an 8.2 percent increase, followed by the South, Midwest and West, each presenting increases in pending sales of 5.9 percent, 4.5 percent, and 0.1 percent, respectively. The trend of rising home prices and pending contracts is expected to continue but at a slower pace in comparison to the growth experienced in 2012. Inventory shortages are the key culprit according to the Pending Home Sales Index. Low inventories of available housing continue to restrain sales in low performing regions.
If the shortage of inventory persists as expected, Yun anticipates an overall increase in price growth of 7 percent this year. With consistent price gains and pending contracts on the rise, real estate professionals and consumers alike are optimistic about the housing market’s immediate future.
For more information about First Preston HT, please visit our website at FirstPrestonHT.com or find us on Facebook.