The National Association of Realtors (NAR) announced on Thursday its seasonally adjusted pending home sales index (PHSI) rose 5.2 percent m-o-m to 108.8 in January 2020, after a revised 4.3 percent m-o-m decline in December 2019 (originally a 4.9 percent m-o-m drop).

Economists had expected pending home sales to increase 2.0 percent m-o-m in January.

On y-o-y basis, the index climbed 5.7 percent after a 4.6 percent jump in December.

According to the report, almost all regional indices recorded m-o-m gains in January. The only exception was the West PHSI, which declined 1.1 percent m-o-m in January to 92.6, but recorded a jump of 5.5 percent from a year ago. Meanwhile, the Northeast PHSI increased 1.3 percent m-o-m to 92.9 in January, 1.2 percent higher than a year ago. In the Midwest, the index surged 7.3 percent m-o-m to 105.3 last month, 6.5 percent higher than in January 2019. Pending home sales in the South climbed 8.7 percent m-o-m to an index of 129.4 in January, a 7.1 percent advance from January 2019.

"This month's solid activity - the second-highest monthly figure in over two years - is due to the good economic backdrop and exceptionally low mortgage rates," noted Lawrence Yun, NAR's chief economist. "We are still lacking in inventory," he said, noting December's and January's combined supply was at the lowest level since 1999. "Inventory availability will be the key to consistent future gains."