US Pending Home Sales Rise 1.8%, Signaling Early Spring Strength
US pending home sales data released Tuesday (March 17) showed a 1.8% rise in February, rebounding for the first time in three months, as buyers took advantage of falling mortgage rates and slowing home price growth. This increase bucked the consensus forecast of a 0.6% decline, signaling an early pickup in activity ahead of the spring selling season.
The main boost came from improved affordability, as mortgage rates briefly fell to their lowest level since 2022. However, the National Association of Realtors (NAR) warned that this could reverse if surging oil prices fuel inflation concerns and push mortgage rates higher; in the first week of March, mortgage rates reportedly jumped the most since September as the Iran war raised inflation risks.
Regionally, purchase contracts rose 2.7% in the South, 4.6% in the Midwest, and slightly in the West, while the Northeast declined. Pending home sales are typically a leading indicator of existing home sales because transactions typically close one to two months after the contract is signed.
The market implications of this data are that it alleviates concerns about a sharp weakening in the housing sector, but its path still depends heavily on mortgage rates. What needs to be monitored next is the direction of mortgage rates following the oil surge, listing dynamics ahead of the spring selling season, and actual existing home sales data, which will confirm whether this improvement continues.
Source: Newsmaker.id
