After unexpectedly reporting a sharp drop in pending home sales in the U.S. in the previous month, the National Association of Realtors released a report on Wednesday showing a bigger than expected rebound in pending sales in the month of February.
NAR said its pending home sales index jumped by 3.1 percent to 107.5 in February after plunging by 5 percent to a downwardly revised 104.3 in January. Economists had expected pending sales to climb by 2.1 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.
Despite the bigger than expected monthly increase, NAR said pending home sales in February were still down by 4.1 percent compared to the same month a year ago.
"Contract signings rebounded in most areas in February, but the gains were not large enough to keep up with last February's level, which was the second highest in over a decade," said NAR chief economist Lawrence Yun.
He added, "The expanding economy and healthy job market are generating sizeable homebuyer demand, but the miniscule number of listings on the market and its adverse effect on affordability are squeezing buyers and suppressing overall activity."
The bigger than expected rebound in pending home sales was partly due to a spike in the Northeast, where pending sales surged up by 10.3 percent.
Pending home sales in the South also climbed by 3.0 percent, while pending sales in the Midwest and West edged up by 0.7 percent and 0.4 percent, respectively.
Yun forecast existing home sales for the year to be around 5.51 million, flat compared to last year. The national median existing home price is expected to increase around 4.2 percent.
For comments and feedback: editorial@rttnews.com