US Pending Home Sales Limp Higher In February Off Record Lows

After two straight months of sizable declines, US pending home sales were expected to rise modestly (+1.0% MoM) in February and they were right as sales rose 2.0% MoM. However, that was not enough to spring sales off record lows as pending home sales dropped 7.2% YoY...

Source: Bloomberg

Contract signings on existing US homes rose 2% to 72 in February, after a storm-battered January that crippled house-hunting, dragging NAR's Pending Home Sales index barely off record lows...

“Despite the modest monthly increase, contract signings remain well below normal historical levels,” NAR Chief Economist Lawrence Yun said in a prepared statement.

Source: Bloomberg

Pending sales climbed 6.2% in the South, the US’s biggest home-selling region, following a 9.2% decline a month earlier. 

The Midwest registered a more modest increase, while pending sales in the West and Northeast fell.

Heavy snowfall especially in the South likely delayed homebuying, pushing deals that would’ve been struck a month earlier into February.

However, sales won’t improve meaningfully until mortgage rates fall back to 5% or lower, according to a 2025 housing outlook from JPMorgan and the Mortgage Bankers Association sees rates staying above 6% at least through next year. 

The contract rate on a 30-year fixed mortgage stood at 6.71% in the week ended March 21, according to MBA.

Finally, bear in mind that pending-homes sales tend to be a leading indicator for previously owned homes, as houses typically go under contract a month or two before they’re sold.