Pending home sales rose 8.3% month over month in December, according to the newest data from the National Association of Realtors (NAR). It was the largest monthly jump in pending home sales since 2020.
NAR’s Pending Home Sales Index (PHSI) increased to 77.3 in December, up from 71.6 in November. On a year-over-year basis, pending sales were up 1.3%. For comparison, the index is benchmarked at a reading of 100 based on 2001 contract activity.
“The housing market is off to a good start this year, as consumers benefit from falling mortgage rates and stable home prices,” NAR chief economist Lawrence Yun said in a statement. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
New home sales, another measure of contract signings, rose 8% in December on the back of declining mortgage rates.
According to an NAR outlook, home sales are projected to rise significantly in 2024 and 2025 as the housing market steadily returns to normal. The trade organization projects a 13% increase in existing home sales between 2023 and 2024 for an annualized pace of 4.62 million and a 15.8% increase between 2024 and 2025 to a pace of 5.35 million units.
Meanwhile, the national median home price is expected to rise 1.4% this year to $395,100, with a further increase of 2.6% in 2025 to reach $405,200.
NAR forecasts the Federal