US pending home sales rise by most in over 3 years
PENDING US home sales shot up in December by the most since June 2020, a report showed on Friday (Jan 26), indicating prospective buyers may be getting drawn from the sidelines by stabilising mortgage rates.
The National Association of Realtors (NAR) Pending Home Sales index rose 8.3 per cent to 77.3, rebounding from a downwardly revised record-low of 71.4 in November. A poll by Reuters showed economists expected a 1.5 per cent increase.
On a year-over-year basis, pending home sales have risen 1.3 per cent.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” said Lawrence Yun, chief economist at the NAR. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
The index had tumbled to record lows last year as higher mortgage rates discouraged homeowners from selling, limiting inventory and buyer traffic.
Mortgage rates neared 8 per cent in October, a two-decade high, but have eased after the Federal Reserve left its policy benchmark rate unchanged since July. For the week ended Jan 25, mortgage rates edged up to 6.69 per cent but remained stabilised in the mid-six per cent range, according to Freddie Mac.
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Pending sales gained by the most in the West and South regions, by 14 per cent and 11.9 per cent, respectively. The Northeast experienced the only decline, with pending home sales falling by 3 per cent on a monthly basis. REUTERS
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