Pending Home Sales Rose 1.6% in February
March 28 2024 - 10:00AM
Key Highlights
- Pending home sales
increased 1.6% in February.
- Month over month,
contract signings climbed in the Midwest and South but sank in the
Northeast and West.
- Compared to one year
ago, pending home sales declined in all U.S. regions.
Pending home sales in February grew 1.6%, according to
the National Association of Realtors®. The Midwest and South
posted monthly gains in transactions while the Northeast and West
recorded losses. All four U.S. regions registered year-over-year
decreases.The Pending Home Sales Index (PHSI)* – a
forward-looking indicator of home sales based on contract signings
– increased to 75.6 in February. Year over year, pending
transactions were down 7.0%. An index of 100 is equal to the level
of contract activity in 2001.“While modest sales growth might not
stir excitement, it shows slow and steady progress from the lows of
late last year,” said NAR Chief Economist Lawrence Yun. “Ongoing
job gains are clearly increasing demand along with more
inventory.”Pending Home Sales Regional BreakdownThe
Northeast PHSI decreased 0.3% from last month to 63.4, a decline of
9.0% from February 2023. The Midwest index soared 10.6% to 81.6 in
February, down 2.5% from one year ago.The South PHSI rose 1.1% to
89.5 in February, falling 8.5% from the prior year. The West index
fell 6.5% in February to 57.1, down 7.9% from February 2023.“The
high-cost regions in the Northeast and West experienced pullbacks
due to affordability challenges,” added Yun. “Home prices rising
faster than income growth is not healthy and adds challenges for
first-time buyers.”Yun further noted, “There will be a steady rise
in inventory from recent growth in home building. Additionally,
many sellers, who delayed listing in the past two years, will begin
to put their homes on the market to move to a different home that
better fits their new life circumstances – such as changes in
family composition, jobs, commuting patterns and retirees wanting
to be closer to their grandkids.” About the National
Association of Realtors®The National Association of Realtors®
is America’s largest trade association, representing 1.5 million
members involved in all aspects of the residential and commercial
real estate industries. The term Realtor® is a registered
collective membership mark that identifies a real estate
professional who is a member of the National Association of
Realtors® and subscribes to its strict Code of Ethics.
# # #*The Pending Home Sales Index is a leading
indicator for the housing sector, based on pending sales of
existing homes. A sale is listed as pending when the contract has
been signed but the transaction has not closed, though the sale
usually is finalized within one or two months of signing.Pending
contracts are good early indicators of upcoming sales closings.
However, the amount of time between pending contracts and completed
sales is not identical for all home sales. Variations in the length
of the process from pending contract to closed sale can be caused
by issues such as buyer difficulties with obtaining mortgage
financing, home inspection problems, or appraisal issues.The index
is based on a sample that covers about 40% of multiple listing
service data each month. In developing the model for the index, it
was demonstrated that the level of monthly sales-contract activity
parallels the level of closed existing-home sales in the following
two months.An index of 100 is equal to the average level of
contract activity during 2001, which was the first year to be
examined. By coincidence, the volume of existing-home sales in 2001
fell within the range of 5.0 to 5.5 million, which is considered
normal for the current U.S.
population.
NOTE: Existing-Home Sales for March will be released April
18. The next Pending Home Sales Index will be released April 25.
All release times are 10 a.m. Eastern. View the NAR Statistical
News Release Schedule.
Information about NAR is available at
nar.realtor. This and other news releases are posted in
the newsroom at nar.realtor/newsroom.
Statistical data in this release, as well as other tables and
surveys, are posted in the “Research and Statistics” tab.
- Pending Home Sales: February 2024
Lauren Cozzi
National Association of REALTORS®
202/383-1178
media@realtors.org