{"id":7718,"date":"2022-03-11T14:30:07","date_gmt":"2022-03-11T19:30:07","guid":{"rendered":"https:\/\/www.realtyhop.com\/blog\/?p=7718"},"modified":"2022-03-11T14:24:47","modified_gmt":"2022-03-11T19:24:47","slug":"pending-home-sales-continue-to-decrease-in-january","status":"publish","type":"post","link":"https:\/\/www.realtyhop.com\/blog\/pending-home-sales-continue-to-decrease-in-january\/","title":{"rendered":"Pending Home Sales Continue to Decrease in January"},"content":{"rendered":"

According to the\u00a0<\/span>National Association of Realtors (NAR) data<\/span><\/a>, pending home sales decreased in January for the third month straight. The data fell below expectations, as a set of economists polled by the Wall Street Journal predicted a modest 1.0% increase.\u00a0<\/span><\/p>\n

Despite a decrease in pending home sales, interest and demand for purchasing a home are still high. However, prospective buyers must confront multiple challenges before completing a transaction on a home. Low inventory, skyrocketing prices, and a steadily increasing interest rate contributed to January’s decline.\u00a0\u00a0<\/span><\/p>\n

Lawrence Yun, Chief Economist at NAR, summed up the problem. “With inventory at an all-time low, buyers are still having a difficult time finding a home. Given the situation in the market \u2013 mortgages, home costs, and inventory \u2013 it would not be surprising to see a retreat in housing demand”, Yun said.\u00a0<\/span><\/p>\n

There was some variation in pending home sales by region. The West was the only region to experience an increase, at 1.5%. The south dropped 6.3%, the Midwest fell 5.9%, and the Northeast Northeast declined 12.1%. Every region saw a decrease in pending home sales compared to a year ago.\u00a0<\/span><\/p>\n

Yun also mentioned that the\u00a0<\/span>Ukraine-Russia conflict\u00a0<\/span><\/a>would likely impact the overall economy, with the real estate market taking a hit. “There’s also the possibility that investors may flee toward safer U.S. Treasury bonds, which may result in temporary short-term relief to interest rates,” Yun added.<\/span><\/p>\n

A volatile and unpredictable economy will likely lead to higher interest rates, placing an even higher financial burden on homebuyers who are increasingly priced out of the home market. If the Russia-Ukraine conflict severely affects oil supply to the West and the United States, as expected,\u00a0<\/span>more inflation<\/span><\/a>\u00a0and rate hikes are also likely.\u00a0<\/span><\/p>\n

Interest Rates Are Up<\/span><\/h3>\n

In January 2021, the average interest rates on a 30-year fixed-rate mortgage (FRM) dropped to a low of 2.65%. Just over a year later, average interest rates on a 30-year FRM are over a basis point higher at 3.76%. While nothing is certain, homebuyers shouldn’t be surprised if average mortgage interests continue rising over the coming months.\u00a0<\/span><\/p>\n

Home Prices Continue to Rise<\/span><\/h3>\n

2021 was a record-breaking year for real estate. Nationwide, home prices went up 14% in 2021, according to\u00a0<\/span>RealtyHop’s 2021 in Review<\/span><\/a>. The trend so far has continued into 2022.\u00a0<\/span>CoreLogic<\/span><\/a>\u00a0reports that between January 2021 and January 2022, U.S. single-family homes appreciated an average of 19.1%. That’s a staggering increase, increasingly pricing out a large percentage of American households from homeownership. As home prices continue to rise and the gap between income and cost of living widens, more and more cities are becoming unaffordable.<\/span><\/p>\n

As housing demand finally subsides and\u00a0<\/span>new developments catch up<\/span><\/a>, prices should start stabilizing over time, especially once the Federal Reserve\u00a0<\/span>raises interest rates<\/span><\/a>.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

According to the\u00a0National Association of Realtors (NAR) data, pending home sales decreased in January for the third month straight. The data fell below expectations, as a set of economists polled by the Wall Street Journal predicted a modest 1.0% increase.\u00a0 Despite a decrease in pending home sales, interest and demand for purchasing a home are […]<\/p>\n","protected":false},"author":21,"featured_media":7720,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-7718","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news"],"yoast_head":"\nPending Home Sales Continue to Decrease in January - RealtyHop Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realtyhop.com\/blog\/pending-home-sales-continue-to-decrease-in-january\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pending Home Sales Continue to Decrease in January - RealtyHop Blog\" \/>\n<meta property=\"og:description\" content=\"According to the\u00a0National Association of Realtors (NAR) data, pending home sales decreased in January for the third month straight. 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