Sales Contracts Slow in January
March 1, 2016
Pending home sales cooled in January due to limited number of homes for sale and weather-related reasons, according to the National Association of REALTORS® latest reading on its Pending Home Sales Index, a forward-looking indicator based on contract signings.
Read more: Sales Make Gains, Prices ‘Rising Too Fast’
Pending home sales fell 2.5 percent to a reading of 106.0 in January but remain 1.4 percent above a year ago.
“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,” says Lawrence Yun, NAR’s chief economist. “Additionally, some buyers could be waiting for a hike in listings come springtime.”
Last month, home prices rose 8.2 percent, which is the largest annual gain since April 2015, NAR reports. But the higher home prices have not motivated more home owners to sell yet.
Yun says supply and affordability conditions won’t significantly improve until homebuilders start building more, particularly homes at lower price points.
“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.”
The South was the only region in the U.S. to see an increase in contract activity in January. The Midwest posted the largest declines at 4.9 percent month-over-month, followed by the West with a 4.5 percent decrease and a 3.2 percent drop in the Northeast
Updated: June 18, 2018