The NAR Pending Home Sales Index for February managed to build on the strength in the January report and gain 2.4% to 111.5 in February after 108.9 (previously 108.0) in the prior month. Compared to a year-ago, the index rose 9.4%.
The number of contracts signed was the best in about three years. Low mortgage rates and a strong labor market had persuaded many consumers that it was a favorable time to buy a home. The pace of sales showed consumer got a jump on the spring buying season. However, the emergence of COVID-19 as a pandemic and measures taken to combat its spread in the US are likely to lead to a good number of contracts being cancelled as steady incomes needed to obtain a mortgage are in jeopardy. The March data will be far less positive.
In February, pending sales were up across regions. The South had a scant increase of 0.1% although that followed on a sharp rise in the prior month. Contracts were up 2.8% in the Northeast, 4.5% in the Midwest, and 4.6% in the West as buyers anxious to take advantage of low mortgage rates reached agreements with sellers for available units.
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