Photo: Joe Wolf/Flickr
Pending home sales in the US were up 12 percent, year-over-year in February according to The National Association of Realtors (NAR). This is the sixth month in a row that measured an uptick over 2014 levels. Pending sales also increased 3.1 percent from January.
Pending sales, where home buyers have a signed contract but haven’t yet closed on the property, tend to lead existing home sales data by one to two months.
The West saw the biggest year-over-year growth with an 18.3 percent boost, while the Northeast recorded the smallest uptick at 4.1 percent. Month-to-month, the Northeast saw the biggest drop in pending sales at 2.3 percent while it was the opposite story in the Midwest, which saw an 11.6 percent surge between January and February.
Lawrence Yun, Chief Economist at NAR, said in an interview that the overall increase in pending sales is “very good news,” with pent up demand being released into the market place.
However, he did note there were drawbacks to the robust activity.
“There could be a choking point…and that would be supply availability. Right now inventory still remains very low. If we don’t have enough supply, that means buyers will be frustrated if they cannot find the right home. We’ve seen in the latest data prices have begun to re-accelerate again because of the housing shortage”
Once again, Yun called for more new construction of both apartment units and single family homes since rents and home prices are rising much faster than incomes.