(Washington, WA – Insurance News 360) – On March 28, the National Association of Realtors announced that pending home sales dropped by one percent during the month of February.
The forward-looking Pending Home Sales Index dropped from 102.9 in January to 101.9 in February, marking the 14th straight month of annual decreases, as year-over-year contract signings dropped 4.9 percent.
“In January, pending contracts were up close to 5 percent, so this month’s 1 percent drop is not a significant concern,” said Lawrence Yun, NAR Chief Economist. “As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring.”
Although there has been growth in the West region, current sales are well below where they were in 2018. He attributes this to a lack of inventory and prices that have risen too quickly.
Denver-Aurora-Lakewood, Colo., Seattle-Tacoma-Bellevue, Wash., San Diego-Carlsbad, Calif., Portland-Vancouver-Hillsboro, Ore.-Wash., and Nashville-Davidson-Murfreesboro-Franklin, Tenn., saw the largest increase in active listings in February compared to a year ago.
“If there is a change at all [in interest rates], I would say the Fed will lower interest rates in 2019 or 2020. That would stimulate the economy and the housing market,” he said. “But the expectation is no change at all in the current monetary policy, which will help mortgage rates stay at attractive levels.”
Yun expects existing home sales to decline to 5.3 million, while the national median existing home price is expected to increase by 2.7 percent.
In the Northeast the Pending Home Sales Index declined 0.8 percent to 92.1, and is now 2.6 percent lower than it was in 2018. In the Midwest the PHSI dropped 7.2 percent and is 6.1 percent lower than February 2018.
Unlike the regions already mentioned pending homes sales in the South and in the West experienced increases. In the southern region, the index crept up 1.7 percent to 121.8, although this is still 2.9 percent lower than February 2018. In the west, the index increased by .5 percent, but is 9.6 percent below February 2018.
Source: National Association of Realtors®