U.S. Pending Home Sales Jump To Highest Level In 20 Months In February

(RTTNews) - Pending home sales in the U.S. increased by much more than expected in the month of February, according to a report released by the National Association of Realtors on Monday, with pending sales jumping to their highest level in twenty months.

NAR said its pending home sales index surged up 3.1 percent to 106.9 in February after climbing 1.2 percent to a slightly downwardly revised 103.7 in January. Economists had expected the index to edge up by 0.3 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the bigger than expected increase, the pending home sales index reached its highest level since hitting 109.4 in June of 2013.

Lawrence Yun, NAR chief economist, said, "Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents.

"These factors bode well for the prospect of an uptick in sales in coming months," he added. "However, the underlying obstacle - especially for first-time buyers - continues to be the depressed level of homes available for sale."

The jump in pending home sales was largely due to a sharp increase in the Midwest, where pending sales soared by 11.6 percent.

Pending home sales in the West also surged up by 6.6 percent, while pending sales in the Northeast and the South fell by 2.3 percent and 1.4 percent, respectively.

NAR said total existing homes sales are forecast to be around 5.25 million in 2015, an increase of 6.4 percent from 2014.

The national median existing home price for this year is expected to increase around 5.6 percent, NAR said, noting that prices rose 5.7 percent last year.

Last Monday, NAR released a separate report showing a rebound in existing home sales in the month of February.

The report said existing home sales rose 1.2 percent to an annual rate of 4.88 million in February after tumbling 4.9 percent to a rate of 4.82 million in January. Economists had expected existing home sales to climb to a rate of 4.90 million.