The Pending Home Sales Index fell 0.8% to 93.9 for February, according to a National Association of Realtors (NAR) report released today. This means the number of Americans who signed contracts to buy homes fell for the eighth straight month.
After falling a revised 0.2% for January, analysts' pessimistic -0.8% prediction proved spot-on. Compared to February 2013, pending home sales are down an even steeper 10.5%.
The index is based on contract signings (with sales usually finalized one or two months later) and is benchmarked to 2001 contract activity. (An index of 100 is equal to the average level of contract activity during 2001, which was the first year the association examined data).
Despite February's lackluster report, NAR chief economist Lawrence Yun expects the recent dip in home sales growth may soon be behind us. "Contract signings for the past three months have been little changed, implying the market appears to be stabilizing," Yun said in a statement today. "Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather delayed transactions should close in the spring."
Looking ahead, the NAR expects the median existing-home price to rise between 5.5% and 6% for 2014 overall. Last year, tight supply pushed prices up 11.5%. But this year, supply might be catching up -- housing starts are expected to soar 19% for 2014, according to the Association.
-- Material from The Associated Press was used in this report.