According to the National Association of Realtors, January pending home sales this past month declined in comparison to previous months, but still increased year-to-year comparing to 2015. The NAR’s Pending Home Sales index declined 2.5 percent from December to January, but 1.4 percent above January 2015. This was the seventeenth consecutive month to see an increase year-over-year.
What cooled down January pending home sales?
Chief Economist at NAR, Lawrence Yun, said there were several reasons that January saw a slight decrease in pending home sales from December. He said both the weather and tight supply were probably factors.
“While January’s blizzard possibly caused some of the pullback in the Northeast, the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers,” Yun says. “Additionally, some buyers could be waiting for a hike in listings come springtime.”
However, there are many other parts of the market to look at outside of pending home sales. Existing-homes sales increased in January, as did price growth.
Yun said he hopes that these rising prices will encourage homeowners to sell, and therefore inventory will increase. Right now, homebuilding is still catching up so affordability is an issue.
“First-time buyers in high demand areas continue to encounter instances where their offer is trumped by cash buyers and investors,” says Yun. “Without a much-needed boost in new and existing-homes for sale in their price range, their path to homeownership will remain an uphill climb.”
NAR has some predictions for the year. They forecast existing sales to be around 5.38 million, an increase of 2.5 percent from 2015. They predict median home price will increase between 4 and 5 percent.
Are you thinking about selling your home? According to the NAR and Yun, more sales is just what the market needs. Contact RE/MAX Paradise today to discuss listing your home!