Favorable Conditions Cause Pending Sales Spike

The National Association of Realtors’ Pending Home Sales Index tracks the number of contracts to buy homes that are signed each month. The index is a good indicator of where home sales are headed because contract signings precede closings by a number of weeks. In January, the PHSI rose 5.2 percent from the month before and is now up 5.7 percent over last year at the same time. Lawrence Yun, NAR’s chief economist, says conditions are favorable for home buyers right now and it may lead to an increase in buying activity as we approach the spring sales season. “With housing starts hovering at 1.6 million in December and January, along with the favorable mortgage rates, among other factors, 2020 has so far presented a very positive sales climate,” Yun said. “Moreover, the latest stock market correction could provide exceptional, even lower mortgage rates for a few weeks, and that would help bring about a noticeable upturn in the coming months.” (source)

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