Contracts to purchase previously owned U.S. homes climbed more than forecast in January, a sign the industry will keep strengthening this year.
The index of pending home resales increased 4.5 percent to 105.9, the highest level since April 2010, after a revised 1.9 percent drop the prior month, a report from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey called for a 1.9 percent advance.
“Things are getting better in housing,” Daniel Silver, an economist at JPMorgan Chase & Co. in New York, said before the report. JPMorgan was the second-best forecaster of pending home sales over the past two years, according to data compiled by Bloomberg. “Low mortgage rates, an improving economy and an improving job market are helping demand. With home prices rising, most people who’d waited for prices to bottom will want to buy now.”
Pending home sales rose in January and continued a 21-month trend of growing from year ago levels, the National Association of Realtors said.
The company’s latest pending home sales index suggests the housing recovery is gaining momentum.
The January NAR Pending Home Sales Index hit its highest reading since April 2010 when the index reached 110.9. Aside from spikes induced by homebuyer tax credits in 2010, the last index high before 2010 occurred in February 2007 when NAR’s index reached 107.9, the association said.
The NAR pending home sales index – which measure contract signings on homes – increased 4.5% to 105.9 in January, compared to a score of 101.3 in December. That index score is also still 9.5% above January 2012 when the index hovered at 96.7.
The data reflects only signed contracts, not actual property closings.
Inventory is the key to this year’s housing market, said Lawrence Yun, NAR’s chief economist.