Kevin Sears President | Official website
Pending home sales in the U.S. rose by 2.0% in February, according to the National Association of REALTORS (NAR). While the Midwest and South saw an increase in activity, the Northeast and West experienced declines. Year-over-year, contract signings decreased in all four regions, with the Midwest enduring the largest drop.
The Pending Home Sales Index (PHSI), which tracks contract signings on homes, increased to 72.0 in February, reflecting a 2.0% rise. However, pending transactions dropped by 3.6% compared to the prior year. Lawrence Yun, NAR's Chief Economist, commented on the situation: "Despite the modest monthly increase, contract signings remain well below normal historical levels."
Yun also addressed the impact of mortgage rates: "A meaningful decline in mortgage rates would help both demand and supply – demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect."
Looking ahead, NAR forecasts mortgage rates to average 6.4% in 2025 and 6.1% in 2026. Existing-home sales are expected to rise by 6% in 2025, with a further 11% increase in 2026. The organization predicts new-home sales will see a 10% boost in 2025, followed by a 5% rise in 2026. The national median home price is anticipated to climb by 3% in 2025 and 4% in 2026. Yun noted, "Home price growth will moderate due to more supply coming onto the market."
Regionally, the Northeast PHSI declined by 0.9% from the previous month, reaching 62.8, which is 2.5% lower than in February 2024. In the Midwest, the index slightly grew by 0.7% to 73.3, a decrease of 4.7% year-over-year. The South experienced a significant 6.2% increase to 86.0, although this is still 3.4% below last year's figures. The West saw its index drop by 3.0% to 55.9, a 3.5% decrease from February 2024.
The National Association of REALTORS is the largest trade association in the United States, with members involved in residential and commercial real estate.
The next update on existing-home sales will be available on April 24, with the subsequent Pending Home Sales Index scheduled for release on April 30.
