Home Sales Rise Unexpectedly in December as Consumer Sentiment Improves
Pending home sales rose 2.5% in December, defying expectations of a drop as mortgage rates eased somewhat. The University of Michigan’s monthly consumer survey rose 9% in January.
According to U.S. News, “this recent low point in home sales activity is likely over,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”
The Northeast and Midwest saw a drop in sales, while the South and West recorded increases. However, overall sales are still off by a third from last year. Analysts had forecast a 1% drop in sales.
“Lower rates and a still strong labor market have helped to stabilize the housing market,” said Odeta Kushi, deputy chief economist at title insurer First American. “The market suffered a deep freeze in the winter months of 2022 but if these dynamics persist, there is reason to believe that it will begin to thaw as the spring buying season approaches.”