October 24, 2016

Sales Contracts Jump to Highest Level in Months

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Sales Contracts Jump to Highest Level in Months

Pending home sales in February zoomed to their highest level in seven months, paving the way for a robust spring. All major regions of the U.S. saw notable gains in contract activity last month, except for the Northeast, according to the National Association of REALTORS®’ latest home sales report.

Read more: Sales Tumble Amid Alarmingly Low Inventories

NAR’s Pending Home Sales Index – a forward-looking indicator is based on contract signings – jumped 3.5 percent to a reading of 109.1 in February. It is 0.7 percent above a year ago.

“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, NAR’s chief economist. “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.”

The following is a regional snapshot of pending home sales in February:

  • Midwest: pending home sales were up 11.4 percent to 112.6 in February and are 2.5 percent above a year ago.
  • South: pending home sales rose 2.1 percent to an index reading of 122.4 in February but are 0.4 percent below a year ago.
  • West: pending home sales rose 0.7 percent in February to 96.4 but are 6.2 percent below a year ago.
  • Northeast: pending home sales dropped 0.2 percent to 94 in February but are 12.6 percent above a year ago.

Source: National Association of REALTORS®