According to the National Association of Realtors, pending home sales rose in February 2020, climbing for a second consecutive month. Each of the four major regions saw an increase in month-over-month contract activity, as well as growth in year-over-year pending home sales transactions compared to one year ago.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, grew 2.4% to 111.5 in February. Year-over-year contract signings increased 9.4%. An index of 100 is equal to the level of contract activity in 2001.
"February's pending sales figures show the housing market had been very healthy prior to the coronavirus-induced shutdown," said Lawrence Yun, NAR's chief economist. He noted that the data does not capture the significant fallout from the pandemic or the measures taken to control the outbreak. "Numbers in the coming weeks will show just how hard the housing market was hit, but I am optimistic that the upcoming stimulus package will lessen the economic damage and we may get a V-shaped robust recovery later in the year."
Yun says that naturally there will be a lengthier stay of inventory in the market from reduced short-term demand, citing data from active listings at realtor.com that show year-over-year increases. Markets drawing some of the most significant buyer attention include Colorado Springs, Colo.; Lafayette, Ind.; Modesto, Calif.; Rochester, N.Y.; and Sacramento, Calif.
"Housing, just like most other industries, suffered from the coronavirus crisis, but once this predicament is behind us and the habit of social distancing is respected, I'm encouraged there will be continued home transactions though with more virtual tours, electronic signatures, and external home appraisals," Yun said. "Many of the home sales that are likely to be missed during the first part of 2020 may simply be pushed into late summer and autumn parts of the year."
February Pending Home Sales Regional Breakdown
The Northeast PHSI rose 2.8% to 96.3 in February, 5.9% higher than a year ago. In the Midwest, the index increased 4.5% to 110.1 last month, 14.9% higher than in February 2019.
Pending home sales in the South inched up 0.1% to an index of 129.2 in February, a 7.1% increase from February 2019. The index in the West grew 4.6% in February 2020 to 97.1, a jump of 10.8% from a year ago.