U.S. pending home sales by the last month of 2016 increased 1.6% month over month to an index of 109, according to a report from the National Association of Realtors (NAR).
The increase represented a rebound as home buyers have adjusted to higher mortgages rates, which apparently didn’t affect the number of homes under contract. The pending home sales gauge dropped 2.5% in November 2016 due to the recent increase in interest rates.
On an unadjusted basis, however, the index fell 2% in December 2016 year over year. Still, home sales rose 0.3% in the same comparable period.
The NAR regularly releases a report on pending home sales that calculate the number of properties that went under contract. These may include turnkey rental properties for sale from Americas Housing Alliance, LLC and the like, multifamily homes or single-family properties.
Those looking to sell their house may strike a deal with a property investment company that focuses on buying standalone homes. You can also transact with individual buyers, although the chances of closing a deal with an institutional buyer are higher.
Take note that the NAR’s pending home sales report is only an indication of home sales, as transactions may still fall apart for different reasons. Its existing-home sales report provides a better picture of the market by measuring sales after closing.
NAR chief economist Lawrence Yun said that home prices might reach above moderate levels if supply continues to be on a downfall in the first months of 2017. Despite steady growth in employment, salaries and the economy, the property sector will not likely maintain a continual increase in sales unless more homes are put on the market.
The Federal Reserve’s planned interest rate increases this year may also further prevent buyers from acquiring individual homes, probably even those that are priced on the lower end.
The NAR expects existing-home sales to rise 1.7% in 2017, while median price will increase 4%. It’s better to buy properties while prices remain low, but make sure to consult with an investment company if you’re undecided on your preferred type of property.