Pending home sales in December recorded an 8.3% spike, according to data from the National Association of Realtors (NAR).
The Pending Home Sales Index, NAR’s forward-looking indicator of home sales based on contract signings – increased to 77.3 in December. Year-over-year, pending transactions were up 1.3%. An index of 100 is equal to the level of contract activity in 2001.
The Midwest, South and West posted monthly gains in transactions while the Northeast recorded a loss. The Midwest, South and West also registered year-over-year increases while the Northeast had a decline in transactions compared to last year.
“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, NAR chief economist. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
NAR also released its Economic Outlook as of January 2024, projecting a 13% year-over-year increase in existing home sales for 2024 to 4.62 million and a 15.8% increase in 2025 (from 2024) to 5.35 million. The annual median home price is expected to rise 1.4% to $395,100 in 2024, and then increase 2.6% to $405,200 in 2025.
“Home sales are projected to rise significantly in each of the next two years as the market steadily returns to normal sales activity,” added Yun, who also predicted four interest rate cuts by the Federal Reserve this year.
