NAR: Pending Home Sales Increased 3.5% In February

Posted by Patrick Barnard on March 28, 2016 No Comments
Categories : Residential Mortgage

Pending home sales increased 3.5% in February compared with January, according to the National Association of Realtors’ (NAR) Pending Home Sales Index.

The index, which is based on contract signings, says that gains in every region except for the Northeast spurred pending home sales to their highest level in seven months.

NAR’s index rose to a score of 109.1 in February – up from a revised score of 105.4 in January.

As of February, the index was 0.7% above February 2015, when the score was 108.3.

Although the index has now increased year-over-year for 18 consecutive months, last month’s annual gain was the smallest.

“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” says Lawrence Yun, chief economist for NAR, in a release. “Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”

Yun notes it is fortunate that – in some respects – home price appreciation has been slowing.

“Any further moderation in prices would be a welcome development this spring,” Yun says. “Particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition.”

Currently, NAR is forecasting that existing-home sales will reach around 5.38 million this year – an increase of 2.4% compared with 2015.

It is also predicting that home prices will increase between 4% and 5%.

In 2015, existing-home sales increased 6.3% and prices rose 6.8%.

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