Pending home sales in January surged to the highest level since August 2013 after a steep drop last month, according to the National Association of Realtors.

All major regions except for the Midwest saw gains in activity in January thanks to improved buyer demand at the beginning of 2015.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, grew 1.7% to 104.2 in January, from an upwardly revised 102.5 in December, and is now 8.4% above January 2014 (96.1).

This marks the fifth consecutive month of year-over-year gains with each month accelerating the previous month’s gain.

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Buyer Demand Boosts Sales

The U.S. real estate market made a robust comeback in 2013, surpassing expectations of many economists, as the combination of low inventories and historically low interest rates caused home prices to rise and even helped fuel bidding wars in some markets, surpassing the expectations of many economists. While positive trends, such as increasing home values, are expected to continue into 2014, mortgage rates are also expected to rise in the coming year and could put a damper on home buyers’ abilities to afford new homes.

Read more HERE.

Though the gap is narrowing, buying costs less than renting in all 100 large U.S. metros. But uncertainty about future home price appreciation means buying isn’t always a safe bet.

It’s not until March of every year job growth is reported from the previous calendar year.  And this year, the revisions to the California labor market were substantial. In January, the EDD reported that 244,000 jobs were created in the California during 2013. This month, the EDD issued its revisions and our state actually created 447,400 jobs last year—an 83% change in the revised jobs total! READ MORE.

Jumbo mortgages are those that exceed the $417,000 (or
$625,500) limit. The limit is set by the government backed
lending agencies, Fannie Mae and Freddie Mac, who
guarantee the loans against default by the borrower.
Typically, jumbo mortgage rates are higher than conforming
rates, traditionally by 0.25 percent or more, because they
have not been eligible for purchase by Fannie or Freddie, and
lenders making such loans would have to portfolio them.

The era of defaults and foreclosures is largely over, for now.
And with home prices rising, even soaring in many areas,
lenders are more confortable with larger loan amounts on
single transactions.
Currently, the conforming rate for a 30 year loan in Southern
California is 4.32 percent. A jumbo loan is currently priced at
4.24 percent. READ MORE.

The new housing market has yet to gain much transaction.
There are more new homes started in California this year and
in 2014, more new developments will break ground.
For now, the existing housing market is responsible for the
housing market recovery, and that recovery has recently
weakened. Why? READ MORE

800,000 federal workers went on furlough October 1, 2013,
as a result of the federal government’s inability to adopt a
new fiscal year budget. This is certainly going to produce
a negative impact on the spending habits of these federal
workers, but just how much?

A Forecast of Interest:

The forecast for general economic growth over the next 9
months assumes an acceleration in homebuilding and home
buying. And for the first half of 2013, new housing starts and
new home purchases were steadily rising, consistent with a
recovery gaining momentum.
However, both of these indicators have backed off now,
though existing home sales throughout the U.S. remain
strong.

Read more HERE

Home prices rose in nearly 90 percent of all U.S. housing markets during the 2nd quarter of 2013, according to the National Association of Realtors. Why you ask? Tight inventory continues to drive up home prices across the country. Specifically in California, Sacramento, Las Vegas, San Francisco, and Los Angeles. One of the major reasons inventory has been so limited is that millions of homeowners have not financially been able to offload their homes without taking a loss, be it an out-of-pocket expense on the loan at closing or a credit loss associated with a strategic default. READ MORE