WASHINGTON – March 27, 2014 – Pending home sales in the U.S. declined for the eighth straight month in February, according to the National Association of Realtors® (NAR). Modest increases in the Midwest and West were offset by declines in the Northeast and South; all regions are below a year ago.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, dipped 0.8 percent to 93.9 from a downwardly revised 94.7 in January, and it’s 10.5 percent below February 2013 when it was 104.9. The February reading was the lowest since October 2011, when it was 92.2.
“Contract signings for the past three months have been little changed, implying the market appears to be stabilizing,” says Lawrence Yun, NAR chief economist. “Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather delayed transactions should close in the spring.”
The PHSI in the Northeast declined 2.4 percent to 77.1 in February, and it’s 7.4 percent below a year ago. In the Midwest, the index rose 2.8 percent to 95.3 in February, but it’s 8.5 percent lower than February 2013.
Pending home sales in the South fell 4.0 percent to an index of 106.3 in February – 9.3 percent below a year ago. The index in the West increased 2.3 percent in February to 86.1, but it’s 16.5 percent below February 2013.
Total existing-home sales are forecast to hit 5.0 million this year, just below the nearly 5.1 million in 2013. Housing starts are projected to rise almost 19 percent and reach about 1.1 million, which is closer to the underlying demand of 1.5 million.
The gain in new home construction will reduce some of the pressure on home prices, with the national median existing-home price expected to rise in the range of 5.5 to 6 percent this year, compared with an 11.5 percent jump in 2013.
© 2014 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.