U.S. Pending Home Sales Edge Up in February Despite Challenges
February Sees Incremental Increase Amidst Inventory Gains and Job Growth
According to the latest report by the National Association of Realtors (NAR), pending home sales in the United States saw a 1.6% uptick in February, attributed to slight improvements in inventory levels and employment figures. While this growth slightly exceeded economists' expectations, on an annual basis, pending home sales experienced a 7% decline.
Lawrence Yun, the NAR's chief economist, highlighted regional disparities, particularly in high-cost areas of the Northeast and West, where affordability challenges led to pullbacks in sales. Rising home prices outpacing income growth pose additional hurdles for prospective first-time buyers.
In 2023, contracts on pending homes dwindled amid reduced inventory and escalating mortgage rates, aligning with the Federal Reserve's tightening monetary policy. Although average 30-year fixed-rate mortgages have moderated from historic highs, currently standing at 6.87%, the NAR anticipates heightened activity in the existing homes market as inventory levels rebound.
Notably, the Midwest recorded the most significant monthly growth in pending sales for February, surging by 10.6%. However, all regions experienced year-over-year declines in pending home sales, underscoring ongoing challenges within the housing market.
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