U.S. pending home sales unexpectedly rose in February
The National Association of Realtors' index of contract signings to purchase previously owned homes increased 0.8% last month to 83.2 — the highest since August — according to data released Wednesday. The median estimate in a Bloomberg survey of economists called for a 3% decline.
The increase in sales indicates the housing market may be getting back on its feet after last year's rapid run-up in borrowing costs. Mortgage
They may decline further if the unfolding banking crisis continues to drive down Treasury yields, and the Federal Reserve has signaled it's nearly done hiking interest rates.
"After nearly a year, the housing sector's contraction is coming to an end," Lawrence Yun, NAR's chief economist, said in a statement.
Signings rose in February in all regions but the West, while the increase was led by a 6.5% advance in the Northeast. However, on an unadjusted basis, contract signings were down 21.1% from a year ago.
There are some other signs the residential real estate sector is feeling a reprieve. Separate data last week showed sales of previously owned homes surged by the most since mid-2020 in February, ending a year-long decline. It also pointed to the first decline in pre-owned home prices in more than a decade.
The pending home sales report is often seen as a leading indicator of existing home sales given homes typically go under contract a month or two before they're sold.
"February's uptick in pending home sales is just one of the green shoots signaling that the housing market is thawing in time for spring home-buying," Ksenia Potapov, an economist at First American Financial, said in a statement. "Other leading indicators, including mortgage applications and builder confidence, have also been trending higher."
— With assistance from Chris Middleton and National Mortgage News staff.
