WASHINGTON (March 28, 2011) — Pending home sales increased in February but with notable regional variations, according to the NATIONAL ASSOCIATION OF REALTORS®.
NAR’s Pending Home Sales Index, which measures the number of homes under contract to sell, but not yet closed, rose 2.1% in February.
NAR Chief Economist Lawrence Yun says February’s rise is part of a longer, upward trend. “Month-to-month movements can be instructive, but in this uneven recovery it’s important to look at the longer-term performance,” he said. “Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20% above the low point immediately following expiration of the home buyer tax credit.”
Yun notes there could have been some weather impact in the February data. “All of the regions saw gains except for the Northeast, where unusually bad winter weather may have curtailed some shopping and contract activity.”
The PHSI in the Northeast fell 10.9% in February and is 18.4% below a year ago. In the Midwest the index rose 4.0% in February but is 15.9% below February 2010. Pending home sales in the South increased 2.7% but are 5.3% below a year ago. In the West the index rose 7.0% and is 0.6% higher than February 2010.
“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5% to 10% this year with the economic recovery, job creation, and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.