The National Association of Realtors (NAR) has reported a significant recovery in U.S. pending home sales in February, following a considerable decrease the previous month. The NAR's pending home sales index rose by 1.6% to 75.6 in February, after a 4.7% decline to a revised 74.4 in January. This uptick largely aligns with economists' expectations of a 1.5% increase, following the previously reported 4.9% drop.
A pending home sale is considered such when the contract has been signed but not yet completed. Finalizing a contracted sale normally takes between four to six weeks. Lawrence Yun, NAR's Chief Economist, conveyed that a modest growth might not seem enthusiastic, but it represents a slow and steady recovery from late last year's lows. He further added that continued job increases are fueling demand, along with more inventory availability.
The recovery in pending home sales was partly attributed to an upswing in the Midwest, where sales went up by 10.6%. Pending home sales in the South rose by 1.1%, while sales dropped slightly in the Northeast by 0.3% and significantly in the West by 6.5%. Yun noted that affordability challenges caused pullbacks in high-cost Northeast and West regions, where home prices are rising faster than income, creating hurdles for first-time homebuyers.
On a different note, the Commerce Department reported a slight 0.3% drop in new home sales in February to an annual rate of 662,000, despite expectations of a 2.9% boost to a rate of 680,000. However, February's new home sales were still up by 5.9% compared to the same month last year, despite the monthly downturn.
