The first evidence that homebuyers are reacting to favorable market conditions came in the National Association of Realtors’ latest Pending Home Sales report.

According to NAR’s index of pending home sales activity, contract signings grew 4.6 percent in January compared to December 2018. While below last year’s level of activity, Chief Economist Lawrence Yun called this a welcome development in light of recent concerns around macroeconomic factors that could depress sales.

“Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers,” Yun said in a February 27 news release on the report.

All four regions defined by NAR saw growth in pending sales, although the South enjoyed the biggest spike in activity. Compared to December, markets in the South saw 8.9 percent more homes put under agreement last month. Notably, the Northeast region was the only one posting year-over-year pending sales growth (7.6 percent above January 2018, and 2.8 percent above December levels).

As inventory grows across the U.S., and assuming interest rates and prices continue moderating, experts like Yun see a strong case for a surge in sales in the coming months.

“Income is rising faster than home prices in many areas and mortgage rates look to remain steady,” Yun said. “Furthermore, job creation will help lift home buying.”