According to a report released by the National Association of Realtors (NAR), the pending home sales index in the United States rose 8.1% in January, marking the biggest rebound since June 2020. This figure surpassed analysts’ expectations, who had predicted an increase of only 1.0%.
The index measures the number of second-hand home purchase contracts that have been signed but not yet closed, and is considered a leading indicator of the health of the housing market. Typically, it takes about 1-2 months from signing a contract until the closing of the sale.
While the monthly rebound is encouraging, the index still fell 24.1% compared to January of last year. However, this decline is attributed to the ongoing effects of the COVID-19 pandemic on the housing market.
Despite the pandemic-related challenges, the housing market has remained resilient, with historically low mortgage rates and a desire for more space driving demand. The NAR expects the housing market to remain strong in the coming months, with the pending home sales index likely to continue to increase.