This just in: pending home sales rose in February, according to the Pending Home Sales Index (PHSI), a forward-looking indicator of housing market activity based on contract signings. Pending home sales rose 3.5% to 109.1 in February from a downwardly revised 105.4 in January, and is now 0.7% above February 2015 (108.3). Although the index has now increased year-over-year for 18 consecutive months, last month’s annual gain was the smallest.
February showed noticeable strides, however, rising to the higher statistic since July of 2015. After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured in part by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory. Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.
It’s likely that the silver lining from February’s slump in existing home sales was that the appreciation dipped 4.4%, which still resides above wage growth.
“Existing-homes sales this year are forecast to be around 5.38 million, an increase of 2.4% from 2015. The national median existing-home price for all of this year is expected to increase between 4 and 5%. In 2015, existing-home sales increased 6.3% and prices rose 6.8%.”
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