Pending home sales in February increased by 1.8% from the prior month but declined 0.8% from one year earlier, according to data from the National Association of Realtors (NAR).
Month-over-month pending home sales rose in the Midwest, South and West, and declined in the Northeast. Year-over-year pending home sales were up in the South and West but were lower in the Northeast and Midwest.
“The slight gain in pending contracts appears to be driven by improved affordability conditions. However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates,” said NAR Chief Economist Lawrence Yun. “The Midwest—the most affordable region of the country—was the strongest performer in February. But the Northeast was held back by a combination of higher home prices and a shortage of supply.”
“For first-time homebuyers, purchasing a home is not a snap decision,” Yun added. “It takes time to build credit, save for a down payment, and fulfill existing rental lease agreements. Still, there is sizable pent-up demand that could be released into the market. Although job gains have been sluggish in recent months, there are still 6 million more jobs in the country than in the pre-Covid period.”
