Rising home prices and mortgage rates affected pending home sales in February, as reported by the National Association of Realtors on Thursday. The Pending Home Sales Index for February was 75.6, showing a 7 percent annual decline. This score is slightly better than the previous month (+1.6 percent) but still far from the maximum score of 100, representing the contract activity in 2001.
NAR Chief Economist Lawrence Yun attributed the annual decline to price trends in the West and Northeast, particularly impacting first-time homebuyers who struggle to keep up with home price growth. Even though inventory levels rose in March, Yun and Realtor.com Senior Economic Research Analyst Hannah Jones highlighted the challenges in the competitive housing market.
Yun and Jones expressed optimism for the future as more sellers and homebuilders bring existing and new-home inventory to the market. However, they emphasized the importance of lower mortgage rates in attracting both buyers and sellers back to the market. The economists indicated that future improvements in the Pending Home Sales Index will depend on a strong job market and anticipated interest rate cuts by the Federal Reserve.
Overall, Yun mentioned that while modest sales growth may not be exciting, it signifies slow and steady progress from the previous year. To stay updated on the latest real estate news and developments, readers are encouraged to subscribe to Inman Connect Las Vegas, where they can gain valuable insights and business opportunities.
The National Association of Realtors reported that rising home prices and mortgage rates led to a decline in pending home sales in February. The Pending Home Sales Index, which measures contract signings, dropped by 7% compared to the previous year. However, there was a slight improvement from the previous month. The decline was primarily attributed to high home prices in the West and Northeast, making it challenging for first-time homebuyers. Despite the decline, experts are optimistic about the future, citing an increase in home inventory and new home construction. However, inventory levels are still lower than last year, creating a competitive market for buyers. The future of pending home sales will depend on factors such as job market strength and potential interest rate cuts by the Federal Reserve. Overall, experts believe that slow but steady progress is being made in the housing market.
Source link
