NAR: Pending Home Sales Down For Eighth Consecutive Month

Posted by Patrick Barnard on March 27, 2014 No Comments
Categories : Residential Mortgage

After reporting last week that existing-home sales for February were down about 0.4%, compared to January, and down about 7.1% compared to February 2013, the National Association of Realtors (NAR) today released figures showing that pending home sales were down about 0.8% for the month, as well.

It was the eighth consecutive month that pending home sales declined on a month over month basis. What's more, the February reading was the lowest since October 2011, NAR reports.

However, the trend is somewhat spotty: Pending home sales were up slightly in the Midwest and West, but this was offset by declines in the Northeast and South. Pending home sales in all regions were below where they were a year ago.

Still, Lawrence Yun, chief economist for NAR, points out that contract signings have remained relatively flat – and with spring now right around the corner, the recent slowdown in home sales may be behind us.

‘Contract signings for the past three months have been little changed, implying the market appears to be stabilizing,’ Yun says in a release. ‘Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather-delayed transactions should close in the spring.’

NAR forecasts that total existing-home sales will reach 5 million this year, just below the nearly 5.1 million closed in 2013. Housing starts are projected to rise almost 19% in 2014 and reach about 1.1 million, closer to the underlying demand of 1.5 million.

NAR predicts that the increase of new home construction this year will reduce some of the pressure on home prices. It forecasts that the national median existing-home price will rise by 5.5% to 6% this year, compared with an 11.5% jump in 2013.

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