U.S. pending sales of existing homes rose unexpectedly in February for the first time in three months, as buyers took advantage of lower mortgage rates and slower price growth.
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According to National Association of Realtors data released Tuesday, the index of contracts signed rose 1.8%. The average forecast of economists surveyed by Bloomberg was for a decline of 0.6%.
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The surge in contract signings in February, as mortgage rates fell to their lowest levels since 2022, is welcome news for the real estate market ahead of the spring selling season, when listings typically rise and activity picks up. Cheaper financing costs and slower price growth have led to a recent improvement in affordability.
“The slight gain in current contracts appears to be driven by improved affordability conditions. However, these conditions could reverse if higher oil prices lead to a rise in mortgage rates,” NAR chief economist Lawrence Yun said in a statement.
In the first week of March,
Housing affordability was a major issue ahead of the November midterm elections. President Donald Trump has taken several steps to boost homeownership, including
Pending home sales in the South, the largest home sales region in the country, increased by 2.7%. They rose 4.6% in the Midwest and rose in the West. The number of contract signings fell in the Northeast.
Pending home sales are typically a leading indicator for previously owned homes because homes are typically under contract for a month or two before being sold.