Midwest, West Lead Pending Home Sales
Article by Daily Real Estate News | March 31, 2015
Pending home sales in February surged to the highest level since June 2013, led by significant gains in contract signings in the Midwest and West, according to the latest reading from the National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on contract signings.
Pending home sales last month increased 3.1 percent month-over-month, and contracts are up 12 percent over last year’s totals. Sizable sales gains in the Midwest and West helped to offset smaller declines in the Northeast and South, according to NAR.
“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent, and the likelihood of more renters looking to hedge against increasing rents,” says Lawrence Yun, NAR’s chief economist. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale.”
The share of first-time home buyers did inch up slightly in February – the first increase since November 2014. First-time home buyers made up 29 percent of buyers in February, up from 28 percent in January.
“Several markets remain highly-competitive due to supply pressures, and REALTORS® are reporting severe shortages of move-in ready and available properties in lower price ranges,” says Yun. “The return of first-time buyers this year will depend on how quickly inventory shows up in the market.”
Regional Outlook Here’s how the Pending Home Sales Index performed across the country in February:
- Northeast: pending home sales dropped 2.3 percent in February but is 4.1 percent above year ago levels.
- Midwest: pending home sales surged 11.6 percent in February and is 13.8 percent above February 2014 levels.
- South: pending home sales fell 1.4 percent in February but are 10.8 percent above last year’s levels.
- West: pending home sales rose 6.6 percent in February and are 18.3 percent above year ago levels.
Source: National Association of REALTORS®; REALTOR® Magazine Online, Daily Real Estate News 033115