February’s pending home sales sprang up 3.1 percent in the National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI). All four of the major regions in the U.S. experienced higher sales, with the Northeast garnering 10.3 percent more, the Midwest 0.7 percent more, the South 3 percent more, and the West 0.4 percent more.
According to Lawrence Yun, chief economist at NAR, the figures are an improvement, but not relative to a year ago.
“Contract signings rebounded in most areas in February, but the gains were not large enough to keep up with last February’s level, which was the second highest in over a decade (112.1),” says Yun. “The expanding economy and healthy job market are generating sizeable homebuyer demand, but the miniscule number of listings on the market and its adverse effect on affordability are squeezing buyers and suppressing overall activity.”
Yun anticipates there will continue to be some sales swings in the Northeast, which was hit with a series of storms.
“Expect ongoing volatility in the Northeast region at least through March,” Yun says. “Although pending sales there bounced back in February following January’s cold weather-related decline, the multiple winter storms over these last few weeks likely put a chill on contract signings once again this month.”
“Homeowners are already staying in their homes at an all-time high before selling, and any situation where they remain put even longer only exacerbates the nation’s inventory crunch,” says Yun. “Even if new-home construction starts picking up at a faster pace this year, as expected, existing sales will fail to break out if these record low supply levels do not recover enough to meet demand.”
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