NAR: U.S. Pending Home Sales Advanced 2.0% in February; Northeast Pending Deals Fell 0.9%
WASHINGTON—Pending home sales improved 2.0% in February, the National Association of Realtors reported on March 27. The Northeast and West experienced month-over-month losses in transactions—with a larger decrease in the West—while the Midwest and South saw gains, which were greatest in the South. Year-over-year, contract signings dropped in all four U.S. regions, with the Midwest undergoing the greatest reduction.
The Pending Home Sales Index grew 2.0% to 72.0 in February. Year-over-year, pending transactions declined 3.6%. An index of 100 is equal to the level of contract activity in 2001.
“Despite the modest monthly increase, contract signings remain well below normal historical levels,” said NAR Chief Economist Lawrence Yun. “A meaningful decline in mortgage rates would help both demand and supply—demand by boosting affordability, and supply by lessening the power of the mortgage rate lock-in effect.”
NAR Quarterly Economic Forecast
“Considering the Federal Reserve's recent forecast for slower economic growth, we expect mortgage rates to slide moderately lower,” said Yun. “But the current high national debt will prevent mortgage rates from falling drastically—and certainly not to the 4%-to-5% range seen during President Trump's first term.”
NAR forecasts mortgage rates will average 6.4% in 2025 and 6.1% in 2026. The association expects existing-home sales will rise by 6% in 2025 and accelerate another 11% in 2026. The new-home sales market has plentiful inventory and, therefore, NAR anticipates it will rise by 10% in 2025 and another 5% in 2026. It predicts that the national median home price will increase by 3% in 2025 and 4% in 2026.
“Home price growth will moderate due to more supply coming onto the market,” added Yun. “Having income and wages rise faster than home prices are welcome to improve affordability.”
Pending Home Sales Regional Breakdown
The Northeast PHSI fell 0.9% from last month to 62.8, down 2.5% from February 2024. The Midwest index inched up 0.7% to 73.3 in February, down 4.7% from the previous year.
The South PHSI jumped 6.2% to 86.0 in February, down 3.4% from a year ago. The West index contracted by 3.0% from the prior month to 55.9, down 3.5% from February 2024.
