(MENAFN) According to data released by the National Association of Realtors (NAR) on Wednesday, pending home sales in the US rose 0.8 percent in February for a third consecutive month. This is a positive sign for the housing market, as the market expectation was for the figure to show a decline of 2.3 percent after it jumped 8.1 percent in January. The rise in pending home sales in December, which was the first in six consecutive months, further indicates that the housing sector’s contraction may be coming to an end.
However, despite the recent uptick in pending home sales, the figures were down 21.1 percent year-on-year, according to the NAR statement. This suggests that the housing market is still grappling with the impact of the pandemic and other economic challenges. Lawrence Yun, the association’s chief economist, noted that "existing-home sales, pending contracts and new-home construction pending contracts have turned the corner and climbed for the past three months," indicating that the housing sector is slowly recovering.
Yun also noted that mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available. This is a positive development for potential homebuyers, as it may make it easier for them to secure financing for their purchases.
Pending home sales measure the change in the number of houses under contract to be sold, but still awaiting the transaction. They exclude new home construction. They are considered a forward-looking indicator of home sales based on contract signings. The recent uptick in pending home sales suggests that the US housing market may be on the path to recovery, but it will be important to continue monitoring the data in the coming months to see if the trend continues.
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