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There aren\u2019t enough homes listed, marking the second monthly decline in a row. Only upper-end houses had more pending home-sale contracts, says NAR economist.<\/span><\/span><\/p>\n<\/div>\n WASHINGTON \u2013 Pending home sales dipped for a second straight month in February, according to the National Association of Realtors\u00ae (NAR). Each of the four major U.S. regions tracked by the report saw month-over-month declines, though results were mixed in the four regions year-over-year.<\/span><\/span><\/p>\n The Pending Home Sales Index (PHSI) \u2013 a forward-looking indicator of home sales based on contract signings \u2013 dropped 10.6% to 110.3 in February. Year-over-year, contract signings fell 0.5%. An index of 100 is equal to the level of contract activity in 2001.<\/span><\/span><\/p>\n \u201cThe demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift \u2013 but contracts are not clicking due to record-low inventory,\u201d says Lawrence Yun, NAR\u2019s chief economist. \u201cOnly the upper-end market is experiencing more activity because of reasonable supply. Demand, interestingly, does not yet appear to be impacted by recent modest rises in mortgage rates.\u201d<\/span><\/span><\/p>\n According to Yun, even with current rising mortgage costs, rates are still expected to remain relatively low at no more than 3.5% in 2021. He says it\u2019s still advantageous to both prospective buyers and current homeowners contemplating refinancing to take advantage of mortgage rates that remain historically low.<\/span><\/span><\/p>\n Nationally, homes priced above $250,000 have largely been driving home sales for the last several months. However, Yun says that even homes priced above $500,000 and less than $1 million are subject to the same low-inventory dilemma.<\/span><\/span><\/p>\n \u201cPotential buyers may have to enlarge their geographic search areas, given the current tight market,\u201d Yun says. \u201cIf there were a larger pool of inventory to select from \u2013 ideally a five- or a six-month supply \u2013 then more buyers would be able to purchase properties at an affordable price.\u201d<\/span><\/span><\/p>\n February pending home sales regional breakdown<\/strong>: The Northeast PHSI fell 9.2% to 92.3 in February, a 3.9% dip from a year ago. In the Midwest, the index dropped 9.5% to 102.4 last month, down 6.1% from February 2020.<\/span><\/span><\/p>\n\n