Pending home sales fall as economic uncertainty remains

"With mortgage rates nearing 6%, an additional 5.5 million households that could not qualify for a mortgage one year ago would qualify at today's lower rates, Yun said in a statement. Most newly qualifying households do not act immediately, but based on past experience, about 10% could enter the marketpotentially adding roughly 550,000 new homebuyers this year compared with last year."

"Year-over-year, pending home sales were down in the Northeast (-8.3%) and Midwest (-3.3%), but up in the south (4.0%) and West (0.3%). Despite the national and regional declines, NAR highlighted 10 markets among the 50 largest metro areas that recorded the largest annual price increases in pending home sales in January. These metros included Phoenix-Mesa-Chandler, Arizona (+11.8%), Boston-Cambridge-Newton, Massachusetts-New-Hampshire (10.7%), Charlotte-Concord-Gastonia, North Carolina and South Carolina (10.7%), the San Francisco Bay Area (8.9%) and Oklahoma City (8.7%)."

"Lawrence Yun, NAR's chief economist, does not feel improving affordability conditions nationwide have yet to induce more buying activity. Most newly qualifying households do not act immediately, but based on past experience, about 10% could enter the marketpotentially adding roughly 550,000 new homebuyers this year compared with last year. If these additional buyers do decide to enter the market, Yun warns that the housing supply will need to increase or buyers will be again faced with rising affordability challenges."

Pending home sales fell month-over-month in the Northeast and South, dropping 5.7% and 4.5%, respectively, while the Midwest and West rose 5.0% and 4.3%. Year-over-year, sales declined in the Northeast (-8.3%) and Midwest (-3.3%) but increased in the South (+4.0%) and West (+0.3%). Ten large metros recorded the largest annual price increases, led by Phoenix (+11.8%), Boston (+10.7%), Charlotte (+10.7%), the San Francisco Bay Area (+8.9%) and Oklahoma City (+8.7%). Mortgage rates near 6% would qualify an additional 5.5 million households; about 10% might enter the market, adding roughly 550,000 buyers. Housing supply must increase to avoid renewed affordability pressures as buying activity potentially rises with improving inventory into spring, when buyers typically gain leverage.

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