Pending home sales reach highest level since August 2013

The purchase market continues to strengthen as improved buyer demand at the beginning of 2015 pushed pending home sales to a 17-month high.

Improved buyer demand at the beginning of 2015 pushed pending home sales in January to their highest level since August 2013, according to the National Association of Realtors (NAR).

All major regions except for the Midwest saw gains in improved buyer demand in January, which has pushed pending home sales to a 17-month high. NAR's Pending Home Sales Index climbed 1.7% to 104.2 in January from 102.5 in December and is now 8.4% above January 2014 index of 96.1.

“The difference this year is the positive factors supporting positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower growth,”Lawrence Yun, NAR chief economist, said. 

He also pointed out that all-cash sales and sales to investors are both down from a year ago which has created less competition and relief for home buyers who still face the challenge of limited homes available for sale.

"All indications point to modest sales gains as we head into the spring buying season," Yun added. "However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. Appreciation anywhere near double-digits isn't healthy or sustainable in the current economic environment."

Total existing-homes sales in 2015 are forecast to be around 5.26 million, an increase of 6.4% from 2014. The national median existing-home price for all of this year is expected to increase near 5%. In 2014, existing-home sales declined 2.9%and prices rose 5.7%, according to the NAR.