The Pending Home Sales Index jumped 8.1 percent to a reading of 82.5 in January, before mortgage rates began another climb, according to data released Monday by the National Association of Realtors.
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Pending home sales jumped significantly in January for the second-straight month, confirming reports of greater homebuyer activity at the beginning of the year on the heels of decreasing mortgage rates.
The Pending Home Sales Index jumped 8.1 percent to a reading of 82.5 in January, but was 24.1 percent lower than January 2022 levels, according to data released Monday by the National Association of Realtors.
Pending home sales represent the number of homes that have gone under contract but have not yet closed, offering a picture of where the housing market is headed in the near future.
The increase in pending home sales came as the 30-year mortgage rate dropped to 6.13 percent at the end of January, the lowest rate since September 2022, according to Realtor.com data.
“Buyers responded to better affordability from falling mortgage rates in December and January,” NAR Chief Economist Lawrence Yun said in a statement.
Mortgage rates have resumed their climb, however, reaching 6.5 percent in February, the highest level of the year so far, suggesting the momentum at the start of the year may not last long.
“At the current rate, the monthly payment on a median-priced home would be 45.1 percent ($630) higher than at the same time last year,” Realtor.com Economic Data Analyst Hannah Jones said in a statement. “This is a $100 improvement over January, but many buyers are still holding off, waiting to see if prices or rates give a bit before getting into the market.”
Yun predicted that pending home sales would drop 11.1 percent overall in 2023 — to a…