US pending home sales jump 8.3%, largest gain in over 3 years

By Ovunc Kutlu

ISTANBUL (AA) - US pending home sales jumped 8.3% in December 2023, compared to the previous month, recording its biggest monthly gain in more than three years, according to data released Friday by the National Association of Realtors (NAR).

The figure came much higher than the market expectation of a 1.5% increase. The November figure was revised down to a decline of 0.3% from no change.

The pending home sales index, which is a forward-looking indicator of home sales based on contract signings, rose to its highest level in five months, and it recorded its largest monthly gain since June 2020.

"The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices," said Lawrence Yun, the association’s chief economist.

"Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand," he added.

On an annual basis, pending home sales were up 1.3% in December 2023, compared to the same month of the previous year.

The NAR said it projects a 13% increase in existing home sales in 2024 to 4.62 million, from 2023, and a 15.8% increase in 2025, from 2024, to 5.35 million.

The annual median home price is expected to rise 1.4% to $395,100 in 2024, and then increase 2.6% to $405,200 in 2025.

"Home sales are projected to rise significantly in each of the next two years as the market steadily returns to normal sales activity," said Yun.

Pending home sales measure the change in the number of houses under contract to be sold but still awaiting transaction. It excludes new home construction.