According to the National Association of Realtors (NAR), pending home sales increased in February but with notable regional variations, as NAR's Pending Home Sales Index (PHSI) rose 2.1 percent to 90.8, based on contracts signed in February, from 88.9 in January. The index is 8.2 percent below 98.9 recorded in February 2010. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
“Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer term performance,” said Lawrence Yun, NAR chief economist. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the homebuyer tax credit.”
The PHSI in the Northeast fell 10.9 percent to 65.5 in February and is 18.4 percent below a year ago. In the Midwest, the PHSI rose four percent in February to 81.1, but is 15.9 percent below February 2010. Pending home sales in the South increased 2.7 percent to an index of 100.3, but are 5.3 percent below a year ago. In the West, the index rose seven percent to 105.6 and is 0.6 percent higher than February 2010.
“All of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity,” said Yun. “We may not see notable gains in existing-home sales in the near term, but they’re expected to rise five to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines.”