The housing market in December got a much stronger-than-expected lift from falling interest rates, suggesting that sales may grow impressively this year.
Pending home sales rose 8.3 percent last month, the National Association of Realtors said Friday.
This was the biggest jump since the “flight from the cities” housing rush in 2020 when pending home sales shot up 14.9 percent in June.
The pace of sales was much swifter than expected by Wall Street. The consensus forecast was for growth of just 1.3 percent after a flat November.
Pending home sales are measured when a contract to purchase a home is signed but the sale is not yet closed. Pending sales typically become closed sales, showing up in the existing home sales figures, 45 to 60 days later.
“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, NAR chief economist. “Job additions and income growth will further help with housing affordability, but increased supply will be essential to satisfying all potential demand.”
The NAR is expecting a big pick up in sales in the coming year. In a forecast release Friday, the NAR projected existing-home sales would rise by 13 percent in 2024.