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Pending Home Sales Rebound
Pending home sales rebound in February even as Realtors slash 2018 sales forecast
By Andrea Riquier
Published:Mar 28, 2018 10:00 am ET
So far, there’s still no lack of demand for homeownership
Is this a turning point for the housing market?
The numbers: Pending-home sales rose 3.1% to 107.5 in February, the National Association of Realtors said Wednesday. Economists had forecast a 3.0% increase.
What happened: NAR’s index, which tracks real-estate transactions in which a contract has been signed but the transaction hasn’t closed, helps foreshadow sales of previously-owned homes. It fell to a more-than three year low in January, and that reading was revised even lower.
The February rebound still leaves the index 4.1% lower than its level a year ago, though NAR noted in a release that last February’s reading was the second-highest in over a decade. Pending sales surged 10.3% in the Northeast, and ticked up 0.7% in the Midwest in February. They rose 3.0% in the South and 0.4% in the West.
The big picture: Even as the housing market is chugging forward, hamstrung by low inventory and surging prices, NAR thinks 2018 will be challenging. The group revised its 2018 forecast to show that sales will be flat compared to 2017 at 5.51 million, after rising only 1.1% in 2017.
The group expects the national median existing-home price to increase around 4.2% after a 5.8% annual gain last year.
Strong price appreciation is a reminder that demand is still outweighing supply. It’s also contrary to the NAR’s belief that tax cuts would drive down home prices by diminishing the incentive to own a home.