Financial News: U.S. Pending Home Sales Unexpectedly Rebound In February

U.S. Pending Home Sales Unexpectedly Rebound In February

(RTTNews) - A report released by the National Association of Realtors on Tuesday unexpectedly showed a significant rebound by pending home sales in the U.S. in the month of February.

NAR said its pending home sales index jumped by 1.8 percent to 72.1 in February after tumbling by 1 percent to a revised 70.8 in January. Economists had expected pending home sales to slump by another 1 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

"The slight gain in pending contracts appears to be driven by improved affordability conditions," said NAR Chief Economist Dr. Lawrence Yun. "However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates."

The unexpected rebound by pending home sales partly reflected strength in the Midwest, where pending home sales surged by 4.6 percent.

Pending home sales in the South also shot up by 2.7 percent and pending home sales in the West climbed by 0.9 percent, while pending home sales in the Northeast plunged by 3.6 percent.

"The Midwest-the most affordable region of the country-was the strongest performer in February," Yun said. "But the Northeast was held back by a combination of higher home prices and a shortage of supply."

"For first-time homebuyers, purchasing a home is not a snap decision," he added. "It takes time to build credit, save for a down payment, and fulfill existing rental lease agreements. Still, there is sizable pent-up demand that could be released into the market."

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