Pending Home Sales Grew for Third Straight Month, Up 0.8% in February
30 March 2023 - 1:00AM
Key Highlights
- Pending home sales rose for the third consecutive month, up
0.8% from January.
- Month-over-month, contract signings increased in three U.S.
regions but declined in the West.
- Pending home sales decreased in all four regions compared to
one year ago.
Pending home sales grew in February for the third consecutive
month, according to the National Association of Realtors®.
Three U.S. regions posted monthly gains, while the West declined.
All four regions saw year-over-year decreases in transactions.
The Pending Home Sales Index (PHSI)* – a
forward-looking indicator of home sales based on contract
signings – improved 0.8% to 83.2 in February.
Year-over-year, pending transactions dropped by 21.1%. An index of
100 is equal to the level of contract activity in 2001.
“After nearly a year, the housing sector’s contraction is coming
to an end,” said NAR Chief Economist Lawrence Yun. “Existing-home
sales, pending contracts and new-home construction pending
contracts have turned the corner and climbed for the past three
months.”
Pending Home Sales Regional Breakdown
The Northeast PHSI raised 6.5% from last month to 72.5, a drop
of 17% from February 2022. The Midwest index improved 0.4% to 84.9
in February, a decline of 16.5% from one year ago.
The South PHSI grew 0.7% to 99.3 in February, dropping 21.7%
from the prior year. The West index decreased 2.4% in February to
64.6, shrinking 28.4% from February 2022.
“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.”
The National Association of Realtors® is America’s
largest trade association, representing more than 1.5 million
members involved in all aspects of the residential and commercial
real estate industries. The term Realtor® is a registered
collective membership mark that identifies a real estate
professional who is a member of the National Association of
Realtors® and subscribes to its strict Code of
Ethics.
# # #
*The Pending Home Sales Index is a leading indicator for the
housing sector, based on pending sales of existing homes. A sale is
listed as pending when the contract has been signed but the
transaction has not closed, though the sale usually is finalized
within one or two months of signing.
Pending contracts are good early indicators of upcoming sales
closings. However, the amount of time between pending contracts and
completed sales is not identical for all home sales. Variations in
the length of the process from pending contract to closed sale can
be caused by issues such as buyer difficulties with obtaining
mortgage financing, home inspection problems, or appraisal
issues.
The index is based on a sample that covers about 40% of multiple
listing service data each month. In developing the model for the
index, it was demonstrated that the level of monthly sales-contract
activity parallels the level of closed existing-home sales in the
following two months.
An index of 100 is equal to the average level of contract
activity during 2001, which was the first year to be examined. By
coincidence, the volume of existing-home sales in 2001 fell within
the range of 5.0 to 5.5 million, which is considered normal for the
current U.S. population.
NOTE: Existing-Home Sales for March will be reported
on April 20. The next Pending Home Sales Index will be on April 27.
All release times are 10 a.m. Eastern. View the NAR
Statistical News Release Schedule.
Information about NAR is available
at nar.realtor. This and other news releases are
posted in the newsroom
at nar.realtor/newsroom. Statistical
data in this release, as well as other tables and surveys, are
posted in the “Research and Statistics” tab.
- Pending Home Sales: February 2023
Lauren Cozzi
National Association of Realtors®
202/383-1178
LCozzi@nar.realtor