- Pending home sales rose for the third month in a row, the National Association of Realtors said.
- Other gauges of the housing market have shown similar indications of a rebound.
- “After nearly a year, the housing sector’s contraction is coming to an end,” NAR’s top economist said.
Pending home sales rose for the third month in a row in February, adding to other signs that the housing market’s retreat is nearly over, the National Association of Realtors reported on Wednesday.
The NAR’s index of contract signings to buy existing homes increased 0.8% last month to 83.2, hitting the highest level since August and surprising forecasters who predicted a 3% drop.
“After nearly a year, the housing sector’s contraction is coming to an end,” NAR Chief Economist Lawrence Yun said in a statement. “Existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months.”
The steady rise could be a sign of future stabilization in housing markets that endured turmoil amid months of surging mortgage rates and low affordability.
Not every US region showed improvement, however, as the West saw a 2.4% decline. The Northeast led all four regions, with pending sales jumping 6.4% last month.
“The affordable U.S. regions – the Midwest and South – are leading the recovery,” Yun added. “Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available.”
Other indicators have pointed to similar regional splits. According to data from Black Knight, home prices on the West Coast are plunging at the same time home prices on the East Coast are surging.
February also marked the first year-over-year nationwide home price decline since 2012, a previous NAR report found. This came as the 30-year mortgage rate remained high, forcing sellers to bring down prices in a bid to attract buyers.
Other analysts see continued price declines as the Federal Reserve continues to tighten monetary policy, which influences mortgage rates.
For instance, Yale economist Robert Shiller expects home prices to keep falling for at least the next six months.
“Maybe if you have a good chance to delay your purchase, it might be a good time to do it,” he told CNBC on Monday.