Pending home sales fell for the fourth consecutive month, according to the National Association of Realtors’ latest report…(NAR)
- M-O-M: The Pending Home Sales Index fell 4.1% to 104.9 in February, this is the 4th consecutive month of declines.
- Y-O-Y: Pending home sales were down 5.4% year-over-year, this is the 9th consecutive month of declines.
SWING AND A MISS: Economists had predicted a slight gain month-over-month of 1.0%.
Regionally, the South continues to dominate with a PHSI of 127.2 even with a 4.4% monthly decline followed by the Midwest at 99.7 (-6.0%), the West at 90.0 (-5.3%), and the Northeast with a 1.9% decline to 85.0.
- REMINDER: An index of 100 is equal to the level of contract activity in 2001.
Lawrence Yun, NAR’s chief economist, said falling sales is still a supply issue but as rates rise affordability will damper demand…
- “Pending transactions diminished in February mainly due to the low number of homes for sale…Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale…“The surge in home prices combined with rising mortgage rates can easily translate to another $200 to $300 in mortgage payments per month, which is a major strain for many families already on tight budgets.”
LOOKING FORWARD: Yun forecasts mortgage rates to be about 4.5% to 5% for the remainder of the year and expects about a 7% reduction in home sales in 2022 compared to 2021.