Kevin Sears President | Official website
Pending home sales in February grew 1.6%, according to the National Association of REALTORS®. The Midwest and South posted monthly gains in transactions while the Northeast and West recorded losses. All four U.S. regions registered year-over-year decreases.
"While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year," said NAR Chief Economist Lawrence Yun. "Ongoing job gains are clearly increasing demand along with more inventory."
Lawrence Yun further added, "The high-cost regions in the Northeast and West experienced pullbacks due to affordability challenges. Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers."
Yun also noted, "There will be a steady rise in inventory from recent growth in home building. Additionally, many sellers, who delayed listing in the past two years, will begin to put their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids."
The Pending Home Sales Index (PHSI) increased to 75.6 in February, with pending transactions down 7.0% year over year. An index of 100 is equal to the level of contract activity in 2001.
In terms of regional breakdown, the Northeast PHSI decreased 0.3% from last month to 63.4, a decline of 9.0% from February 2023. The Midwest index soared 10.6% to 81.6 in February, down 2.5% from one year ago. The South PHSI rose 1.1% to 89.5 in February, falling 8.5% from the prior year. The West index fell 6.5% in February to 57.1, down 7.9% from February 2023.
The National Association of REALTORS® represents 1.5 million members involved in all aspects of the residential and commercial real estate industries. The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed.
Pending contracts are good early indicators of upcoming sales closings. The index is based on a sample that covers about 40% of multiple listing service data each month. An index of 100 is equal to the average level of contract activity during 2001.
