Pending home sales in the U.S. saw a modest decrease in the month of February, according to a report released by the National Association of Realtors on Wednesday, although pending sales remain near their highest level in almost three years.
NAR said its pending home sales index edged down by 0.4 percent to 104.8 in February after jumping 3.8 percent to 105.2 in January. Economists had been expecting the index to dip by 0.7 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.
The modest drop in pending home sales in February came after the index reached its highest level since April of 2010 in January.
Despite the monthly decrease, NAR noted that pending home sales are up by 8.4 percent compared to the February of 2012, representing the 22nd straight month of year-over-year growth.
Lawrence Yun, NAR chief economist, said limited inventory is holding back the market in many areas, adding, "Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels."
"Most local home builders are small businesses and simply don't have access to capital on Wall Street," Yun continued. "Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market."
The drop in pending home sales in February was partly due to a 2.5 percent decrease in pending sales in the Northeast.
Pending home sales in the South also edged down by 0.3 percent, while pending sales in the Midwest and the West inched up by 0.4 percent and 0.1 percent, respectively.
Looking ahead, Yun forecast a 7 percent increase in existing home sales in 2013 to approximately 5 million sales, which is near the current level of activity.
"The volume of home sales appears to be leveling off with the constrained inventory conditions, and the leveling of the index means little change is likely in the pace of sales over the next couple months," Yun said.
On Tuesday, the Commerce Department released a report showing that new home sales pulled back by more than expected in February after reaching their highest level in over four years in the previous month.
The report said new home sales fell 4.6 percent to a seasonally adjusted annual rate of 411,000 in February from the revised January rate of 431,000. Economists had expected new home sales to drop to 425,000 from the 437,000 originally reported for the previous month.
The bigger than expected drop by new home sales came after the annual rate of sales reached its highest level since September of 2008 in January.
Last Thursday, NAR released a separate report showing a modest increase in existing home sales in the month of February
NAR said existing home sales rose 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January. Economists had been expecting existing home sales to climb to an annual rate of 5.01 million.
While the annual rate of existing home sales in February came in slightly below economist estimates, it still reflected the highest level since November of 2009.
For comments and feedback contact: editorial@rttnews.com
Forex News
April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.