Last week, the national real estate news was not likely to provide much guidance for local buyers or sellers. The “story” was simply too convoluted. On Friday, the “LATEST NEWS” from the National Association of Realtors® looked like this:
Even so, for the second month in a row, December’s pending home sales fell 3.8% from November.
Those pending home sales are usually indicators of activity “a month or two before” they show up in the final totals—yet January’s volume rose 6.7% over December’s.
The rise in the number of sales from December to January despite headline-grabbing price rises would be thoroughly encouraging to home sellers were it not for that “pending” number. Likewise, buyers might be turned off by those prices were it not for the surrounding national news. With overall inflation rates surpassing the previous 40-year high, buyers had to be asking themselves what the price rises represented in real terms—was it actually that +15.4% minus the inflation rate?
When question marks abound, that’s usually a yellow caution light for buyers—especially buyers of mammoth ticket items like houses. But with everyone expecting monthly home loan interest rates to climb, the final question mark was whether the deals being closed today will soon look like bargains in retrospect.