US Pending Sales Surge Unexpectedly
The National Association of Realtors reported on Monday that pending sales contracts for previously owned homes in the US rose unexpectedly in February, a sign the nation's long-hurting housing market may be picking up steam. The trade group's Pending Home Sales Index, which is based on contracts to buy homes signed during a given month, rose 2.1 percent in February to a reading of 90.8.
Economists, meanwhile, had forecast the index would to fall 1.0 percent after declining 2.8 percent in January. Compared to February 2010, the pending home sales measure was down 8.2 percent. The report was a welcome bit of good news for a market that has struggled to gain a footing even as the broader economy breathes signs of life.
Last week, the US housing market received a pair of reports indicating that sales of new and used homes slumped in February. The contracts that account for the pending sales index usually close one or two months later, meaning that sales will likely pick up in the next few months.
Despite Monday's report, most analysts continue to predict a long, drawn-out recovery for the US housing market as it continues to work its way out of the worst recession since the 1930s. While sales may be getting ready to pick up slightly, prices are likely to be depressed for some time due to the glut of inventory caused by a slowed sales pace and record numbers of foreclosures over the last few years. Demand is expected to be kept in check, as well, as long as the nation's unemplyment rate stays elevated.
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