The latest Pending Home Sales Index from the National Association of Realtors showed promising results this month, with pending sales in upward movement.
Lawrence Yun, NAR chief economist, said this is a hopeful indicator going into the spring home-buying season. "Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year. With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations."This is the highest point seen since April of 2010, when buyers took advantage of the first time home-buyer tax credit.
Regionally, the South led the way increasing 7.7 percent in January. The Northeast also saw a 7.6 percent rise for the month. The Midwest and West both fell, however, falling 3.8 and 4.4 percent respectively.
"Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery," Yun said. "If and when credit availability conditions return to normal, home sales will likely get a 15 percent boost, speed up the home-price recovery, andthereby significantly reduce the number of homeowners who are underwater." In the new homes market, sales declined in January to a seasonally adjusted pace of 321,000, but were up 3.5 percent over last year at this time.
NAHB Chief Economist David Crowe reports, "This is indicative of the incremental, steady progress that the market is making toward recovery in conjunction with modest economic and job growth. Increasingly, potential buyers are feeling better about their financial situation and their ability to buy a home, but the challenges posed by tight credit conditions and appraisal issues continue to slow that process."
Despite the decline for the month this is the fastest pace seen again since April 2010. Finally, the Mortgage Bankers Association reports that mortgage applications declined this last week by 0.3 percent. Michael Fratantoni, Vice President of Research and Economics reports that "more than 20 percent of refinance applications were for HARP loans.
He continued that "the HARP share of total refinance applications has increased over the past month. Purchase application volume increased over the week, but remains within the narrow and anemic range of activity we have seen since the expiration of the homebuyer tax credit in May 2010."