More California homes went under contract last month, as buyers showed signs of life heading into the spring season.
Pending home sales across the state rose 22.9% from December, the first increase since October, the California Assn. of Realtors said Wednesday. The January figures boost confidence in a market that cooled after a torrid rebound early last year.
Buyers have struggled with low inventory, higher mortgage rates and sharply higher prices. That has raised questions about just how robust the upcoming spring home-buying season will be.
But the trade group said buyers have begun to adjust. Home prices and interest rates have shown signs of stabilizing and more homes have slowly come on sale, the association said.
"We're starting to see a turning point in the market as we approach the spring home-buying season," the association's president, Kevin Brown, said in a statement. "Home sellers realize that home prices are holding steady and are gearing up for the upcoming season by listing their homes for sale."
Pending sales are a gauge of future activity and reflect contracts signed, but not closed. The data is not seasonally adjusted, so the increase from December reflects, in part, a normal seasonal boost come January.
Compared with January 2013, pending deals are down 17.5%. And signed contracts have now fallen over the year by double-digits for five straight months. Those drops indicate buyers still struggle in a market defined by affordability constraints and very few homes for sale.
If properties sold at their current pace, there was a 4.4-month supply of non-distressed homes for sale in January. That's an increase from three months in December.
Economists generally consider a supply of about six months to be healthy.