Pending Home Sales Improved for Second Straight Month, Up 8.1% in January

As a real estate agent in Miami, Florida, I am always keeping a close eye on the housing market. The National Association of REALTORS® (NAR) has released some promising news for the industry with its latest Pending Home Sales Index (PHSI) report.

According to the report, pending home sales improved in January for the second consecutive month, increasing from 8.1% to 82.5. This is a forward-looking indicator of home sales based on contract signings. However, there was a year-over-year drop in transactions of 24.1%. All four U.S. regions saw monthly gains but also experienced year-over-year drops.

The South PHSI, which includes Florida, showed a promising increase of 8.3% to 99.2 in January, despite a dip of 24.7% from the previous year. This was attributed to stronger job growth in the region. As a real estate agent in Miami, I have witnessed firsthand the positive impact that job growth can have on the housing market.

NAR anticipates that the economy will continue to add jobs throughout 2023 and 2024, which could lead to a steady drop in the 30-year fixed mortgage rate. With an improving interest rate environment and job gains, NAR expects annual existing-home sales to drop 11.1% in 2023 to a total of 4.47 million units before jumping 17.7% in 2024 (5.26 million units).

While NAR projects new-home sales will fall 3.7% year-over-year in 2023, it predicts they will grow 19.4% in 2024. Additionally, NAR predicts that median existing-home prices will be stable compared to the previous year for most markets, with the national median home price decreasing by 1.6% in 2023, to $380,100, before regaining positive traction of 3.1% in 2024, to $391,800.

In South Florida, the real estate market has been robust in recent years, and this trend is expected to continue. Although there has been a recent drop in inventory, home prices have remained steady. According to the Miami Association of Realtors, there was a 4.4% increase in median sales prices for single-family homes in Miami-Dade County in January 2023, compared to the same period last year.

As Lawrence Yun, NAR Chief Economist has stated, “home sales activity looks to be bottoming out in the first quarter of this year before incremental improvements will occur. But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”

As a real estate agent in Miami, I am excited to see what the future holds for the South Florida market. If you're considering buying or selling a property, now may be the right time to make a move. With a promising outlook for job growth and a drop in mortgage rates, it could be an opportune time to invest in real estate.