Us home sales hit 18-month high

Photo credit: Cyndie

Pending sales of US property climbed 1.7 per cent in January 2015, according to the National Association of Realtors, as demand from buyers increased. Sales in January 2015 were 8.4 per cent higher year-on-year, the fifth month in a row of annual growth and the highest figure recorded since August 2013.

Lawrence Yun, NAR chief economist, says for the most part buyers in January were able to overcome tight supply to sign contracts at a pace that highlights the underlying demand that exists in today's market.

"Contract activity is convincingly up compared to a year ago despite comparable inventory levels," he said. "The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth."

Indeed, there are more favourable conditions in the market for buyers at present, thanks to falling unemployment and low interest rates. All-cash sales and sales to investors, meanwhile, both fell from a year ago, creating less competition and some relief for buyers who still face the challenge of limited homes available for sale.

Yun forecasts a modest rise in sales in the spring buying season.

"However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices," he comments. "Appreciation anywhere near double-digits isn't healthy or sustainable in the current economic environment."

Total existing-homes sales in 2015 are forecast to be around 5.26 million, an increase of 6.4 per cent from 2014. The national median existing-home price for all of this year is expected to increase near 5 per cent.