With stock markets roller-coasting by the most on record, February pending home sales rose 3.5% MoM (seasonally-adjusted) dramatically beating expectations. In fact, sales spiked 29.5% MoM (non-seasonally-adjusted) – the best February spike ever. Price gains have slowed notably, which is being cheered by NAR’s Larry Yun, but notably the majority of the sales surge in Feb was driven by an 11.4% spike in The Midwest (biggest since Dec 2008).
Panic buying homes in Feb:
Lawrence Yun, NAR chief economist, says pending sales made promising strides in February, rising to the highest index reading since last July (109.8).
“After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory,” he said.
“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers. Without adequate supply, sales will likely plateau.”
According to Yun, the one silver lining from last month’s noticeable slump in existing-home sales was that price appreciation lessened to 4.4 percent, which is still above wage growth but certainly more favorable than the 8.1 percent annual increase in January.
“Any further moderation in prices would be a welcome development this spring,” adds Yun. “Particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition.”
So now Larry prefers lower prices?
Finally, something curious: the entire February surge came from the “Midwest”
- The PHSI in the Northeast declined 0.2 percent to 94.0 in February, but is still 12.6 percent above a year ago.
- In the Midwest the index shot up 11.4 percent to 112.6 in February, and is now 2.5 percent above February 2015.
Best Pending Home Sales in MidWest in 10 years, biggest MoM spike since Dec 2008…
- Pending
home sales in the South increased 2.1 percent to an index of 122.4 in
February but are 0.4 percent lower than last February. - The index in the West climbed 0.7 percent in February to 96.4, but is now 6.2 percent below a year ago.
So, according to realtors, there was an influx of new home purchases in Chicago? Why would we ever doubt that.
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