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First Cut: January Pending Home Sales Index points to warm activity during cold weather

The NAR Pending Home Sales Index for January rose 5.2% to 108.8 after 103.4 in December. Low mortgage rates are continuing to coax out homebuyers even during the typically slower winter months. The index was 5.7% above the 102.9 of January last year when rates were significantly higher. The Freddie Mac rate for a 30-year fixed rate mortgage was 3.62% in January, down from the 3.72% in December and lower than the 4.46% in January 2019. The brisk pace of gains for the index points to a robust sales of existing units in the coming month or two.

The regional activity for contracts signed in January was substantially higher in the South (up 8.7%) and Midwest (up 7.3%), and gained ground in the Northeast (up 1.3%). Contracts were fewer in the West (down 1.1%), but still on a solid pace and could be due to a lack of affordable supply as much as a lack of buyers.

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