U.S. Existing Home Sales Surge in January as Housing Market Booms

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U.S. Existing Home Sales Surge in January as Housing Market BoomsMore Americans entered into agreements to buy pre-owned homes in January, a reported released Friday by the National Association of Realtors showed.

The gauge of pending sales rose 1.7 percent, up from a decline of 1.5 percent in December. Economists in a Bloomberg poll had expected the figure to rise 2 percent. The U.S. property market is expected to continue booming due to lower mortgage rates as well as improvements in the labor market, though high prices, credit hurdles and scarcity of available properties may slow it down.

“All indications point to modest sales gains as we head into the spring buying season,” Bloomberg News quoted Lawrence Yun, the chief economist at NAR, as saying. “However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices.”

Three out of four U.S. regions reported growth, with the South leading with 3.2 percent pace, followed by the West with 2.2 percent and the Northeast at 0.1 percent. The Midwest region reported a decline of 0.7 percent in existing home sales.

The seasonally-adjusted pending sales index stood at 104.2, the most since August 2013. A measure of 100 ties with the mean level of contract signings in 2001, which the NAR terms as historically healthy house purchasing statistics.

Most economists prefer pending sales index since it monitors contract activity, rather than purchases of pre-owned homes, which are recorded once the deal is closed, mostly after a month or two. Pre-owned home sales account for the 90 percent of the U.S. housing market activity. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com