The National Association of REALTORS® (NAR) just reported that contract signings decreased 5.7% month over month in January. This marks the third consecutive month of decreasing pending home sales. The NAR Pending Home Sale Index is a forward-looking indicator of home sales based on contract signings. Compared to a year earlier, these contract signings are down 9.5% overall nationwide. In fact, a decrease in contract signings has been seen in all four major regions of the country on annual basis. The month-over-month trends are highlighted below.
Pending home sales snapshot
- National month-over-month: decline of 5.7%
- Northeast Region: decline of 12.1%
- South Region: decline of 6.3%
- Midwest Region: decline of 5.9%
- West Region: increase of 1.5%
Factors impacting pending home sales
The month-over-month decreases in pending home sales should not come as a surprise. Although home buyer demand remains strong, inventory levels are at record lows which is factoring into skyrocketing prices. In addition, mortgage rates have risen a full percentage point over the last six months. Needless to say, this is also impacting buying power.
All in all, most economists expect the housing market to remain strong for the remainder of this year. With this said, it would not be entirely surprising to see a retreat in housing demand given the various headwinds in the economy. If you are a home buyer in this market, it is extremely important to remain vigilant with your home search in order to act swiftly on any new listings. In addition, an emphasis should be placed on strengthening your cash position in order to make your offer as strong as possible.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!