Pending home sales jumped 3.5% in February, to the highest level in seven months, according to the National Association of Realtors (NAR).
Compared to the prior year, pending sales of condos, co-ops and single-family homes rose 5.1%.
Economists had forecast that the forward-looking indicator rose 1.1% month-on-month, and fell 0.5% on a not-seasonally-adjusted basis compared to the prior year.
There was an 11.4% spike in the Midwest. Sales only declined regionally in the Northeast, by 0.2%.
NAR chief economist Lawrence Yun wrote in the release that sales were boosted by low mortgage rates and a small, seasonal rise in inventory.
He added (emphasis ours), “Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.“
The housing market is currently facing an undersupply problem that is helping to lift prices beyond the affordable reach of many Americans.
Bank of America Merrill Lynch economists had expected a rebound in sales for February after a 2.5% drop in January, which was the most in two years.
“Other indicators of home sales have been positive, including a gain in new home sales, mortgage purchase applications and the NAHB housing index,” they wrote in a client preview.
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