Pending sales refer to the number of contracts to buy homes signed during the month. Because they track signings – and not closings – they are considered a good indicator of future existing home sales. In other words, any increase in pending sales will likely be reflected in upcoming home sales numbers, as those buyers complete the closing process. For this reason, the National Association of Realtors’ Pending Home Sales Index is closely watched by analysts and industry experts. In February, the index rose 3.5 percent and hit a seven-month high. According to Lawrence Yun, NAR’s chief economist, the results are a good indication that the real estate market is beginning to heat up. “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,” Yun said. “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.” A look at regional results shows February’s improvement was driven primarily by an 11.4 percent gain in the Midwest. However, contract signings also rose in the South and West. The Northeast, on the other hand, was relatively flat, falling just 0.2 percent. More here.
