Pending home sales in February continue to decline, lowering the index another 10.6% to 110.3. And following eight consecutive months of year-over-year gains, contract signings decreased 0.5% when compared to last year. The decrease in contract signings is primarily due to a lack of inventory on the market. According to Lawrence Yun, NAR’s chief economist, “the demand for a home purchase is widespread, multiple offers area prevalent, and day-on-market are swift but contracts are not clicking due to record-low inventory.” The buyers are there, but the inventory is not supporting the number of buyers on the market. If buyers had more properties to choose from, we would see a higher volume of contract signings.
Although the market is not maintaining its momentum, the mortgage rates are projected to remain on the lower side. These low mortgage costs and rates will still provide benefits to potential buyers and homeowners looking to refinance.
Pending home sales Slip 10.6% in February. (2021, March 31). Retrieved April 07, 2021, from https://www.nar.realtor/newsroom/pending-home-sales-slip-10-6-in-february