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First Cut: NAR Pending Home Sales Index a little lower in February, but holding up

The NAR’s Pending Home Sales Index for February dipped 1.0% to 101.9 from 102.9 in January. However, the level remained above the disappointing 98.7 in December 2018 and was in line with the so-so pace of October and November. Sales under contract remain well below those at this time last year. However, recent declines in mortgage interest rates should help encourage buyers to comment to a purchase and may lure out some potential seller in the face of limited supply.

Pending home sales were mixed across regions for February from January. The Northeast saw a mild 0.8% decline while the Midwest dropped 7.2%, probably correction after a jump in the prior month used some pent-up demand. Sales in the South were up 1.7% and the West rose 0.5%. These are modest gains necessitated in part by the destruction of housing supply in the fall during episodes of natural disasters. Buyers in those regions have to snap up available units while supply is short.

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