The Midwest and West saw a slight rise in pending home sales numbers in February, but it wasn't enough to keep the country's numbers afloat. According to the National Association of Realtors, pending home sales fell for the eighth straight month in February, as the Northeast and South both reported declines.
The Pending Home Sales Index plunged 0.8 percent to 93.9 after a downward revision of 94.7 in January.‡ The February mark is 10.5 percent below its figure from the same month a year prior when the index was nearly 105. The February reading was also the lowest since October 2011 when the Pending Home Sales Index came in at just 92.2.
"Unfortunately this reading is consistent with the downward trend in mortgage applications, which appear still not to have adjusted fully to the plunge in affordability over the past year," Ian Shepherdson of Pantheon Macroeconomics told Business Insider.
Pending sales by region
The Pending Home Sales Index in the Northeast is 7.4 percent below its total from a year ago after dropping 2.4 percent to 77.1 in February. It was even worse in the South, as pending home sales fell behind last year's pace by 9.3 percent. The South's index was at 106.3 after a four percent drop in February.
The bright spots of the index - the Midwest and West - saw modest increases.‡
The index climbed 2.8 percent to 95.3 in February for the Midwest, while the West increased 2.3 percent in February to 86.1. But both regions are still below their pace from a year ago. The Midwest is down 8.5 percent compared to February 2013, and the West is 16.5 percent below its total from a year prior.
The total existing-home sales reached 5.1 million in 2013. Existing-home sales are forecast to fall below that level at around 5.0 million this year.
A turnaround could be on the horizon
Lawrence Yun, chief economist for NAR, said the lethargic home sale numbers could soon surge to life ‡ as home prices rise.
"Contract signings for the past three months have been little changed, implying the market appears to be stabilizing," Yun said. "Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather delayed transactions should close in the spring."
Meanwhile, housing starts are slated to increase by nearly 19 percent in 2014. The rise in new home construction could help minimize the pressure on home prices.
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