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Tags: pending | home | sales | housing

Pending Home Sales Jump 5,2%, Most in More Than 9 Years

Pending Home Sales Jump 5,2%, Most in More Than 9 Years
(AP)

By    |   Thursday, 27 February 2020 12:29 PM

Contract signings for existing U.S. homes surged in January, rising the most since October 2010 after slumping a month earlier, adding to signs of more momentum in the housing market.

An index of pending home sales increased 5.2% from the prior month, according to National Association of Realtors data Thursday that exceeded the median forecast in a Bloomberg survey of economists.

These contract signings — a barometer of finalized purchases over the next two months — have risen 5.7% over the past year.

Contract signings rose 6.7% from a year earlier on an unadjusted basis.

Pending home contracts are seen as a forward-looking indicator for the well-being of the housing market because they become sales within a couple of months.

In January, contracts rose across three of the nation's four regions. Pending home sales jumped 8.7% in the South and 7.3% in the Midwest. They also rose 1.3% in the Northeast but fell 1.1% in the West.

"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," Lawrence Yun, the NAR's chief economist, said in a statement.

The rebound from the steepest drop in almost a decade is the latest sign housing remains supported by mortgage rates hovering around a three-year low as well as a solid job market and steady pay gains. Further stabilization in residential real estate may foreshadow a more robust spring selling season that could support economic growth for yet another quarter.

Federal Reserve interest-rate cuts have helped push mortgage rates down, and plunging government bond yields may help to keep borrowing costs low. The 30-year Treasury yield sank to an all-time low this week amid rising concern about the global economic fallout of the coronavirus.

Other housing data including construction and new-home sales have strengthened recently. Sales of existing properties remained solid in January, while new-home sales reached the strongest pace since mid-2007.

“This month’s solid activity -- the second-highest monthly figure in over two years -- is due to the good economic backdrop and exceptionally low mortgage rates,” Lawrence Yun, NAR’s chief economist, said in a statement. “We are still lacking in inventory.”

Material from Bloomberg, Reuters and the Associated Press has been used in this report.

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Economy
Contract signings for existing U.S. homes surged in January, rising the most since October 2010 after slumping a month earlier, adding to signs of more momentum in the housing market.
pending, home, sales, housing
382
2020-29-27
Thursday, 27 February 2020 12:29 PM
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