Homes Sales Reach Worst Level Since October 2011
The latest housing numbers fail to relieve doubts about the real estate market. Pending home sales in the United States remained at their worst level in more than two years last month. However, sales might be stabilizing as the spring shopping season begins.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, declined 0.8 percent to 93.9 in February from an downwardly revised 94.7 in January, according to the latest report from the National Association of Realtors. On average, economists expected sales to post a slight gain. It was the lowest reading for the index since October 2011 and 0.5 percent below from a year earlier when it was 104.9. In fact, pending home sales have now declined for eight consecutive months.
Weather was once again mentioned in the report, but it should start to fade into the background. “Contract signings for the past three months have been little changed, implying the market appears to be stabilizing,” said Lawrence Yun, chief economist at NAR, in a press release. “Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather delayed transactions should close in the spring.”
With housing affordability issues preventing many potential homebuyers from making a purchase, sales for all major regions in the country were below year-ago levels. The Pending Home Sales Index for the South sank 4 percent, while the Northeast declined 2.4 percent. On the positive, sales rose 2.8 percent in the Midwest and 2.3 percent in the West.
The National Association of Realtors expects total existing-home sales this year to total around 5 million units, which is slightly below the nearly 5.1 million recorded last year. Housing starts are projected to rise almost 19 percent in 2014, and reach about 1.1 million, closer to the underlying demand of 1.5 million. Meanwhile, the national median existing-home price is expected to rise at a more reasonable range of 5.5 to 6 percent in 2014 and grow another 4 percent in 2015.
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