Pending home sales activity drops to four-month low

Pending home sale transactions decreased for the fourth month in a row in February, according to the National Association of Realtors.

NAR’s pending home sales index (PHSI), a forward-looking indicator of home sales based on contract signings, fell 4.1% to 104.9 last month. Compared to a year ago, sales were down by 5.4%.

“Pending transactions diminished in February mainly due to the low number of homes for sale,” said NAR chief economist Lawrence Yun. “Buyer demand is still intense, but it’s as simple as ‘one cannot buy what is not for sale. It is still an extremely competitive market, but fast-changing conditions regarding affordability are ahead,” he said. “Consequently, home sellers cannot simply bump up prices in the upcoming months but need to assess the changing market conditions to attract buyers.”