In a sign the US housing market could be stabilizing, pending home sales grew for the third consecutive month in February, even as mortgage rates climbed higher last month.
According to data released Wednesday from the National Association of Realtors, the forward-looking indicator of home sales saw contract signings increase in February from January everywhere in the country except the West, where contracts declined.
The pending sales index, based on signed contracts to buy a home rather than the final sales that are accounted for in existing home sales, rose by 0.8% from January to February. This was a considerably smaller jump than the 8.1% surge in January from December.
“After nearly a year, the housing sector’s contraction is coming to an end,” said Lawrence Yun, NAR’s chief economist. “Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months.”
Compared to last year, when the market was much busier prior to mortgage rates spiking, pending sales in February were down 21.1%.
“The affordable U.S. regions — the Midwest and South — are leading the recovery,” Yun added. “Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available.”