After a slow start to the year, the Pending Home Sales Index increased 3.1% in February, but remains 4.1% below a year ago. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR). The PHSI increased to 107.5 in February from a downwardly 104.3 in January.
The PHSI increased by 10.3% in the Northeast and 3.0% in the South, as well as 0.7% in the Midwest and 0.4% in the West. Year-over-year, the PHSI is lower in all four regions by 1.5% in the South, 2.2% in the West, 5.1% in the Northeast and 9.5% in the Midwest.
NAR suggested that the expanding economy and healthy job market continue to generate demand, despite the tight inventory, increasing prices, rising mortgage rates and cold weather. February existing home sales increased 3% in February, and although flat, February new home sales were up 2% year-over-year. Builder confidence remains on solid footing as growing demand is expected to spur continued growth in new residential construction.