As your real estate resource, The Mendosa-Balboni Team is pleased to share the latest trends in the market. According to a recent report from the National Association of Realtors, pending home sales have sprung to their highest level in nearly a year and second-highest level in over a decade. Positive activity was found widespread with all major regions having experienced healthy gains in activity.
The Pending Home Sales Index has displayed a large increase of 5.5% to 112.3 in February up from 106.4 in January. This surge was 2.6% higher than last year and is the highest point since April of 2016 and the second highest since May of 2006.
NAR chief economist, Lawrence Yun, shared that the increase in activity is a sign that spring market is nearly upon us. “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country,” he said. “The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year. Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”
Yun anticipates there to be ebbs and flows this spring market as the supply is challenged to meet demand. Homes are going under agreement at a very fast pace particularly in the lower and mid price range markets. Housing stock is still thin and prices are escalating due to multiple offer situations.
“The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy,” said Yun. “The country’s healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation’s low homeownership rate.”
Looking further into the year, existing home sales are expected to be around 5.57 million which is an increase of 2.3% from 2016. Despite prices, the median existing home sale price is expected to rise by 4%.
More details from the Pending Home Sales Index by region of the United States in February were as follows. The Northeast had an increase of 3.4% to 102.1 while the Midwest rose by 11.4% to 110.8. The South increased by 4.3% to 127.8 and the West went up by 3.1% to 97.5. In total, all major markets are showing great signs of activity.