NEW YORK - Pending home sales climbed 2.0% to an index reading of 97.0 in January after a revised 1.9% decrease to 95.1 in December, originally reported as a 3.5% decline to 96.6, according to a report released Monday by the National Association of Realtors.
The 97.0 reading is the highest since a 111.3 level in April 2010, when buyers rushed to take advantage of the home buyer tax credit.
Economists polled by Thomson Reuters predicted a 1.0% increase for the index.
Year-over-year the pending homes sales index is up 8.0% from last January, when the index was 89.8.
Regionally, pending sales were mixed. The Northeast saw a 7.6% increase to 78.2, while sales gained 7.7% to 109.1 in the South. In the Midwest sales fell 3.8% to 88.1, and sales dropped 4.4% to 101.9 in the West.
“Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year,” NAR Chief Economist Lawrence Yun said. “With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations.
“Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery,” Yun added. “If and when credit availability conditions return to normal, home sales will likely get a 15 percent boost, speed up the home-price recovery, and thereby significantly reduce the number of homeowners who are underwater.”