A slight decline in mortgage rates in December and January contributed to an improvement in pending home sales for the second consecutive month. That’s according to data released this week from the National Association of Realtors. The pending index for January improved 8 percent.
“Buyers responded to better affordability from falling mortgage rates,” said NAR Chief Economist Lawrence Yun. NAR anticipates the economy will continue to add jobs throughout the year and in 2024, with the 30-year fixed rate mortgage steadily dropping to an average of 6.1 percent in 2023 and 5.4 percent in 2024.
“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” said Yun. “But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country.” Meanwhile, NAR also predicts median existing home prices will be stable for most markets–with the national median decreasing by 1.6 percent this year to $380,100 before regaining positive traction of 3.1 percent in 2024 to $491,800.