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January’s wicked weather had no impact on pending home sales, according to the latest data from the National Association of Realtors (NAR), which reported that buyer demand last month reached the highest level since August 2013.
NAR’s Pending Home Sales Index rose 1.7 percent to 104.2 in January from an upwardly revised 102.5 in December and is now 8.4 percent above January 2014 (96.1). This is the fifth consecutive month of year-over-year gains.
Pending home sales experienced the largest increase in the South, up 3.2 percent to an index of 121.9 in January (the highest since April 2010) and is 9.7 percent above the January 2014 level. The Northeast and West saw modest increases in January, while the index for the Midwest slipped 0.7 percent to 99.3 in January—although it is 4.2 percent above January 2014.
This new data was in stark contrast to earlier in the week, when NAR reported that existing-home sales declined in January to their lowest rate in nine months. Lawrence Yun, NAR chief economist, warned that the mostly positive start to 2015’s pending-home sales was no guarantee to a vibrant year.
“All indications point to modest sales gains as we head into the spring buying season,” said Yun. “However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. Appreciation anywhere near double-digits isn't healthy or sustainable in the current economic environment.”