Pending home sales see improvement
Pending home sales increased 1.6% in February, according to the latest Pending Home Sales Index (PHSI) released this morning by the National Association of Realtors (NAR).
A forward-looking indicator of homes based on contract signings, the PHSI increased to 75.6 in February. Year over year, pending transactions were down 7%. An index of 100 is equal to the level of contract activity in 2001.
“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.”
Here’s how pending home sales performed on a regional basis:
- The Northeast PHSI decreased 0.3% from last month to 63.4, also a decline of 9% from February 2023.
- The Midwest index soared 10.6% to 81.6 in February but is 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 high-cost regions in the Northeast and West experienced pullbacks due to affordability challenges,” added Yun. “Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers.”
Yun added, “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 NAR will release its latest existing-home sales report, including data for March, on April 18. The next PHSI will be issued on April 25.
Existing-home sales in February surged ahead by 10.3%.
