The rate of pending sales for existing homes rose 2.1 percent compared to January but declined 8.2 percent compared to February 2010, according to a National Association of Realtors report released today.
The association’s Pending Home Sales Index is based on purchase contracts signed but not yet closed. The index was 90.8 in February — a score of 100 is equal to the average level of contract activity in 2001, the first year that index data was collected.
"Pending home sales have trended up … since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the homebuyer tax credit," said Lawrence Yun, NAR’s chief economist, in a statement.
The Northeast was the only region to register a month-to-month index drop in February, down 10.9 percent to 65.5. The region also saw the sharpest year-over-year drop, down 18.4 percent.
The Midwest saw the second-largest year-over-year decrease, down 15.9 percent, to 81.1. Month-to-month, the index rose 4 percent. In the South, the index fell 5.3 percent year-over-year, to 100.3, and rose 2.7 percent in the region compared to January.
The West was the only region to see both month-to-month and year-over-year gains. The index rose 0.6 percent from February 2010, to 105.6. Compared to January, the index rose 7 percent — more than in any other region.
NAR expects new-home sales to hit a seasonally adjusted annual rate of 263,000 in the first quarter and to rise every quarter thereafter, to a rate of 319,000 for the year, below 2010’s rate of 322,000.
NAR’s expectations for new-home sales have steadily dropped since an August forecast that projected a 44.8 percent rise in new-home sales in 2011.
Last month, the association forecasted a 5.2 percent rise in new-home sales in 2011, down from a 17.7 percent increase projected in its previous forecast. The latest outlook calls for a 56.6 percent rise in such sales in 2012. Sales fell 22.6 percent and 14.4 percent in 2009 and 2010, respectively.
NAR’s forecast for existing-home sales also fell slightly, to a 7.4 percent rise this year, and 5.27 million total existing-home sales. The association also upped its forecast for 2012 slightly, to a 5.6 percent increase. Existing-home sales fell in February after three straight months of increase.
NAR expects existing-home prices to fall 1 percent this year, to a median $171,200, and then rise 3.1 percent in 2012, to $176,500. New-home prices will remain essentially flat this year, rising 0.6 percent, to $222,300, and then jumping 3.9 percent next year, to $231,000.
The association expects the rate on 30-year fixed-rate mortgages to rise to 5.3 percent this year and 6 percent next year, from 4.7 percent in 2010.
Unemployment is projected to shrink to 9.1 percent this year and to 8.5 percent in 2012, from 9.6 percent in 2010. U.S. real gross domestic product (GDP) is expected to fall to 2.6 percent this year, from 2.9 percent last year, and to rise back to 2.9 percent in 2012.