Despite that historically, sales are often low in the winter months including January, the National Association of Realtors' Pending Home Sales Index found that signing rose the first month of the year on both a monthly and annual basis.
According to the report, the index increased 4.5 percent to 105.9 from 101.3 recorded the previous month. In January 2012, the index was below 100 at 96.7 - signifying that more consumers may be confident in homeownership, as housing market factors and the overall economy have been improving. NAR noted this was the highest reading seen since April 2010 when the index flexed upward to 110.9. This sudden increase in the midst of the housing slump was credited to the expiration of a homebuyer tax credit. Before this deadline, the reading hadn't been comparably high since February 2007 when it was 107.9.
Different regions saw varying gains in pending sales, but all posted positive gains on a month-over-month basis. In the Northeast, sales jumped 8.2 percent, bringing the index to 84.8 in January. The index was 10.5 percent higher than the same month a year earlier.
The South also saw a 5.9 percent increase, as the index moved forward to 119.3. When compared to the HPI from January 2012, pending sales remained 11.3 percent higher on a year-over-year measurement. In the Midwest, the index improved 4.5 percent to 105 and was 17.7 percent higher than seen this time last year.
Despite posting a 0.1 percent gain in January, pushing the HPI to 102.1, the index was 1.5 percent below January 2012's recorded index.
Chief economist of NAR, Lawrence Yun, credits both housing market gains and economic stability to growing interest from buyers and investors. Making the purchase when the market is healthy and job opportunities are available can make for a better homeownership experience.
"Favorable affordability conditions and job growth have unleashed a pent-up demand," said Yun. "Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country. It's also why we're experiencing the strongest price growth in more than seven years."
Additionally, 5 million existing homes are predicted to be sold in 2013, though the inventory is currently low, according to current property data. This is expected to build back up, providing those looking to buy a house with a larger variety of potential investments