February 25, 2019

Pending home sales see sharp increase

Approved contracts for home sales in the 11-counties monitored by the Northeast Tennessee Association of Realtors (NETAR) saw substantial month-over- month and year-over-year increases in January. At the end of the month, there were 948 active, pending sales in the region.

Pending sales are forward-looking indicators based on new contract signings reported by Realtor Property Resource (RPR).

The number of new pending sales was up by 218 from December and 205 from January last year. Last month’s total new contracts -714 - was the largest monthly increase since 2015.

Active, pending sales were up 234 from December and up by 406 compared to January last year. It was the largest monthly number of active approved contracts since April 2016.

Pending sales usually move to closings in 30 to 45 days.

Some of January’s spike in the active category is probably a left over from the federal government shutdown, which delayed some closings.

The spike in new contracts is likely a reaction to a monthly progression of mortgage rate declines.

 “Lower mortgage rates are making homes more affordable in the months before the housing market heats up for the spring buying season,” NETAR President Karen Randolph said. The 30-year fixed rate dropped for the third week in a row and stood at 4.35 percent the week ending Feb. 21 “Buyers are looking at this drop as a signal the spring rates will be at one-year lows during the upcoming peak buying and selling season. “The big challenge for buyers will be a tight inventory and higher sales prices,” she added.

A sale is listed as pending when a contract has been signed, but the transaction has not closed. It’s not uncommon to see as many as 5 percent fall through. Lately, that fall-through rate has been higher due to more sale of a current home and financing contingencies.  Pending sales in this report include single-family, townhome and condominium contracts.

NETAR is the voice for real estate in Northeast Tennessee - is the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,200 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, monthly Trends Reports and the regional market analytics can be found on the NETAR websites at .