Pending home sales increased in February and reached its highest level in over a year and second-highest level in over a decade according to NAR (National Association of Realtors). All major regions saw a notable hike in contract activity last month. According to an index used by NAR called the Pending Home Sales Index, there was an increase of 3.4% in February to 102.1 in the Northeast, 11.4% to 110.8 in the Midwest, 4.3% to 127.8 in the South and 3.1% to 97.5 in the West. This is the second highest level it has hit since May of 2006 and a sure sign of better days to come in for NYC property management firms.
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. According the NAR, the index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.
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NAR chief economist Lawrence Yun stated that February’s convincing bump in pending sales is proof that demand is rising with spring on the doorstep. “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country. The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”
Existing-home sales nationwide are expected be around 5.57 million this year which would be an increase of 2.3 percent from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4 percent. In 2016, existing sales increased 3.8 percent and prices rose 5.1 percent.