U.S. Pending Home Sales Fell by More Than Expected in February

(Bloomberg) -- Contract signings to purchase previously owned U.S. homes fell more than estimated in February, suggesting that the prior month’s surge resulted from pent-up demand and that a sustainable recovery may take more time.

The index of pending home sales fell 1 percent from the prior month, after a downwardly revised 4.3 percent increase in January, according to data released Thursday from the National Association of Realtors in Washington. The gauge fell 5 percent from a year earlier following a 3.3 percent annual decline.

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Official’s View

“As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring,” NAR Chief Economist Lawrence Yun said in a statement. For the Fed, “the expectation is no change at all in the current monetary policy, which will help mortgage rates stay at attractive levels.”

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• Pending sales were mixed regionally, rising in the South and West as the Northeast and Midwest saw declines.
• Pending-home sales are often looked to as a leading indicator of existing home sales, which make up 90 percent of the market. Since sales are counted once a deal closes, the measure can be a good gauge of the health of the housing market in the next couple of months.

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