Pending Home Sales Rising
Pending Home sales are rising and here are the key takeaways. Numbers from the National Association of Realtors® (NAR) from December 2022 are in. Some good news is that pending home sales have improved for the first time since May. In fact, they are up 2.5% since November. Although homes going under contract decreased in the Northeast and Midwest states, the South and West states are having the opposite trend. Overall the pending sales declined compared to last year on average.
Is the Market Stabilizing?
According to NAR Chief Economist Lawrence Yun said, “This recent low point in home sales activity is likely over.” He cites mortgage rates as “the dominant factor driving home sales.” Yun thinks “recent declines in rates are clearly helping to stabilize the market”. This sounds like a positive outlook.
Future Rates Predictions
After reviewing this new information, Yun also shares his predictions on future rates. He believes “The new normal for mortgage rates will likely be in the 5.5% to 6.5% range”. He notes that employment numbers are going to be the strongest factor in affecting the housing markets. With regard to the differences in the various areas of the country, he adds, “The South, in particular is set to outperform the rest of the country, thanks primarily to better market conditions”. (Credit to NAR Find and read the full article here.)
The Pending Home Sales Index
These numbers are based on the Pending Home Sales Index and is used often as indicator of housing markets. The index takes an overall 40% sample from the MLS data each month to review to establish market trends. Timing is something that must also be in this analysis.
The amount of time from when a home goes under contract to closing varies with a number of factors. Issues with buyer funding, inspections, appraisals are a few reasons that can affect time frames. You can learn more about how all of this is calculated here.
Want to Understand More?
Viewing these numbers can seem confusing at best. What it means to an individual will differ depending on each unique circumstance and situation. That’s why we recommend you talk to a knowledgeable experienced Realtor® regarding your own needs. Where ever you find yourself in your home owner journey, we are here to help. You can reach out to us anytime to get your questions answered that pertain solely to your circumstance. You can contact us here.
Your friend and Realtor®,