Pending Home Sales Index up 3.1%
The Pending Home Sales Index for February increased 3.1% to 107.5 from a downwardly revised 104.3 in January, according to the National Association of Realtors.
Despite the increase, the index remains 4.1% below a year ago, the NAR said while pointing to weakening affordability and not enough inventory on the market. The index is a forward-looking indicator based on contract signings.
“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,” said Lawrence Yu, chief economist of the NAR. “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 forecasts “ongoing volatility,” particularly in the Northeast through March, noting that continuous winter storms — which plagued the region in March — are “likely to put a chill on contract signings once again this month.”
The PHSI in the Northeast surged 10.3% to 96 in February but is still 5.1% below a year ago. In the Midwest, the index inched forward 0.7% to 98.9 in February, but is 9.5% lower than February 2017.
Pending home sales in the South rose 3% to an index of 125.7 in February, but are 1.5% percent lower than February 2017. The index in the West climbed 0.4% in February to 96.9, but is 2.2% below a year ago.
Prospective buyers continue to feel the strain of swift price growth — up 5.9% so far in 2018 — and the higher borrowing costs will only add to the pressures placed on their budget, the NAR said. In the meantime, more would-be sellers have decided to balk at listing their home for sale out of uneasiness of losing their low mortgage rate — especially if they refinanced in recent years.
“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,” Yun said. “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.”
For the year, Yun now forecasts for existing-home sales to be around 5.51 million — flat from 2017. The national median existing-home price is expected to increase around 4.2%. In 2017, existing sales increased 1.1% and prices rose 5.8%.
Despite the increase, the index remains 4.1% below a year ago, the NAR said while pointing to weakening affordability and not enough inventory on the market. The index is a forward-looking indicator based on contract signings.
“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,” said Lawrence Yu, chief economist of the NAR. “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 forecasts “ongoing volatility,” particularly in the Northeast through March, noting that continuous winter storms — which plagued the region in March — are “likely to put a chill on contract signings once again this month.”
The PHSI in the Northeast surged 10.3% to 96 in February but is still 5.1% below a year ago. In the Midwest, the index inched forward 0.7% to 98.9 in February, but is 9.5% lower than February 2017.
Pending home sales in the South rose 3% to an index of 125.7 in February, but are 1.5% percent lower than February 2017. The index in the West climbed 0.4% in February to 96.9, but is 2.2% below a year ago.
Prospective buyers continue to feel the strain of swift price growth — up 5.9% so far in 2018 — and the higher borrowing costs will only add to the pressures placed on their budget, the NAR said. In the meantime, more would-be sellers have decided to balk at listing their home for sale out of uneasiness of losing their low mortgage rate — especially if they refinanced in recent years.
“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,” Yun said. “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.”
For the year, Yun now forecasts for existing-home sales to be around 5.51 million — flat from 2017. The national median existing-home price is expected to increase around 4.2%. In 2017, existing sales increased 1.1% and prices rose 5.8%.