Pending home sales in January bounced to a level not seen since the last days of the homebuyer tax credit in spring 2010. Called the Pending Home Sales Index, the report, which is based on pending contracts for home purchases, rose 2% from December nationwide. Even better, the jump in the South region was the most significant: an increase of 7.7%.
According to a report published on Mortgage News Daily, National Association of Realtors chief economist Lawrence Yun said the increase is a good sign. “The trend in contract activity implies we are on track for a more meaningful sales gain this year,” Yun said.
Yun also points to the impact of better jobs reports and greater affordability as factors heralding a good sales season. But he points out that a return to normal credit availability is key to a sustained recovery.
From this vantage point, that seems to be on the horizon. Increasingly, lenders seem to be servicing their loans, which would indicate increased confidence on their part. And while underwriting remains stringent, the new rules governing lending, which were put in place last spring, aren’t “new” anymore–so lenders and brokers know how to do business in the more legislated reality. At McGowin-King, we’re still locking loans for 30 days and closing them on time. And with rates at levels not seen in more than 50 years, the extra work required to make a loan happen pays off in huge savings over the life of the loan.