The National Association of Realtors (NAR) Thursday morning released its data on pending sales of existing homes for January. The pending home sales index rose 1.7% from an upwardly revised index reading of 102.5 in December to the January reading of 104.2. That is 8.4% higher than in January 2014, when the index reading was 96.1. The January reading is the highest since August 2013 and marks the fifth consecutive month of year-over-year gains with each month’s gain higher than the previous month’s.

The consensus estimate called for a month-over-month increase of 2% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

The NAR’s chief economist noted:

Contract activity is convincingly up compared to a year ago despite comparable inventory levels. The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth. All indications point to modest sales gains as we head into the spring buying season. However, the pace will greatly depend on how much upward pressure the impact of low inventory will have on home prices. [Home price] appreciation anywhere near double-digits isn’t healthy or sustainable in the current economic environment.

Pending sales totals were mixed in the four NAR geographic regions. Pending home sales in the Northeast U.S. increased 0.1% in January, posting an index reading of 84.9, up 6.9% from January 2014. The index fell 0.7% in the Midwest but is 4.2% above last January’s reading. Pending sales jumped 3.2% in the South and are now 9.7% higher than a year ago. Sales rose by 2.2% in the West to an index score of 96.4, and they are 11.4% higher than year-ago levels.

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