The report is in from the National Association of Realtors (NAR).

According to Housing Wire, insufficient supply levels and contract activity in the West and Midwest decreased, bringing down pending home sales to their lowest level in a year.

The Pending Home Sales Index is a “forward looking indicator,” based on contract signings, and was down 2.8 percent to 106.4 in January, from 109.5 in December.

“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” said NAR Chief Economist Lawrence Yun.

“Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”

The demand is so high that buying interest hit its highest point since the Great Recession of 2008.

“As households grow more confident in their personal finances and job growth continues throughout the country, home sales increase across the country,” said Yun.

While this news is positive, for every action there is an equal and opposite reaction.

“January’s accelerated price appreciation is concerning because it’s over double the pace of income growth and mortgage rates are up considerably from six months ago,” said Yun.

“Especially in the most expensive markets, prospective buyers will feel this squeeze to their budget and will likely have to come up with additional savings or compromise on home size or location.”

The NAR reports shows that existing home sales are projected to hit 5.57 million for the year, which is an increase of 2.2 percent from 2016, while the national median existing-home price is expected to increase 4 percent. This is compared to 2016 when existing homes sales increased almost four percent and home prices rose over five percent.

“Sales got off to a fantastic start in January, but last month’s retreat in contract signings indicates that activity will likely be choppy in coming months as buyers compete for the meager number of listings in their price range,” said Yun. ##

 

(Image credits are as shown above.)

 

Submitted by RC Williams to the Daily Business News for MHProNews.