NAR released a summary of pending home sales data showing that January’s pending home sales are down modestly 2.5 percent from last month but slightly improved 1.4 percent from a year ago. January’s pending sales reveal a slow beginning to the year with the South being the only region to have gains in pending sales of 0.3 percent from last month.
Pending sales are homes that have a signed contract to purchase on them but have yet to close. They tend to lead existing-home Sales data by 1 to 2 months.
All regions showed increases from a year ago except the South, which had a decline of 1.3 percent. The Northeast saw the biggest gain from a year ago at 10.9 percent while the West had the smallest gain at 0.4 percent.
From last month, the Midwest had the largest decline at 4.9 percent while the West followed with a decline of 4.5. The Northeast had the smallest dip in pending sales at 3.2 percent.
The pending home sales index level was 106.0 for the US.
The 100 level is based on a 2001 benchmark and is consistent with a healthy market and existing-home sales above the 5 million mark.
Despite a steady start to the year for existing-home sales, a slow start for 2016 pending sales implies that there could be some weakness ahead in existing-home sales. An improvement in inventory levels would help combat price acceleration and provide potential home buyers more options, possibly reversing the slow start to the year.