Pending home sales increased 1.7 percent in January, recovering the entire 1.5 percent decline in December. These gains support our outlook for existing home sales to improve modestly in 2015.
Pending Home Sales Points to Continued Gains
- The pending home sales index rose to 104.2 in January, reaching its highest level since August 2013. The index increased 6.5 percent year-over-year.
- On a three-month moving average basis, year-over-year gains in pending home sales are now outpacing existing home sales. This may indicate that the recent weakness in existing home sales could reverse in the coming months.
South and West Lead the Way
- The South and West posted the strongest gains in December. Year over year, these same two regions also grew the fastest, increasing 9.3 percent and 7.0 percent, respectively.
- Some slowdown is likely in the South, as the fall in oil prices hinders economies with large energy sectors, such as Texas. We expect home sales in Texas to slow in 2015, but to increase solidly in Florida, Georgia and the Carolinas.
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