Key Highlights

• Pending home sales increased 1.6% in February.
• Month over month, contract signings climbed in the Midwest and South but sank in the Northeast and West.
• Compared to one year ago, pending home sales declined in all U.S. regions.

Washington, D.C. – March 28, 2024 (nar.realtor) Pending home sales in February grew 1.6%, according to the National Association of REALTORS®. The Midwest and South posted monthly gains in transactions while the Northeast and West recorded losses. All four U.S. regions registered year-over-year decreases.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – increased to 75.6 in February. Year over year, pending transactions were down 7.0%. An index of 100 is equal to the level of contract activity in 2001.

“While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” said NAR Chief Economist Lawrence Yun. “Ongoing job gains are clearly increasing demand along with more inventory.”

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Pending Home Sales Regional Breakdown

The Northeast PHSI decreased 0.3% from last month to 63.4, a decline of 9.0% from February 2023. The Midwest index soared 10.6% to 81.6 in February, down 2.5% from one year ago.

The South PHSI rose 1.1% to 89.5 in February, falling 8.5% from the prior year. The West index fell 6.5% in February to 57.1, down 7.9% from February 2023.

“The high-cost regions in the Northeast and West experienced pullbacks due to affordability challenges,” added Yun. “Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers.”

Yun further noted, “There will be a steady rise in inventory from recent growth in home building. Additionally, many sellers, who delayed listing in the past two years, will begin to put their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids.”   

About the National Association of REALTORS®

The National Association of REALTORS® is America’s largest trade association, representing 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.

The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

NOTE: Existing-Home Sales for March will be released April 18. The next Pending Home Sales Index will be released April 25. All release times are 10 a.m. Eastern. View the NAR Statistical News Release Schedule.

Washington, D.C. – March 22, 2024 (nar.realtor) National Association of REALTORS® President Kevin Sears released the following statement after the publication of the 2024 Economic Report of the President(link is external), which outlined support for increasing housing production and the need to address land use barriers:

“NAR is pleased that the Biden administration is moving forward to support approaches that address the lack of affordable housing supply. We commend their plan that:

• Gives resources to localities to review their current zoning laws, especially as they relate to obstacles to new housing production; 
• Encourages tax benefits that incentivize converting commercial buildings to residential uses; 
• Supports regulatory approaches that encourage localities to plan for housing production and zoning reform;
• Reduces and streamlines permitting and regulatory burdens without sacrificing safety and environmental quality; 
• And promotes housing development in transportation corridors.

“NAR has long advocated for such approaches to promote and accelerate housing production. There is much to be done to resolve the severe underbuilding gap and lack of affordable housing that exists today, but we are encouraged by the administration’s attention to this issue. Homeownership is still an essential part of realizing the American Dream and helping families create intergenerational wealth. We look forward to continuing to work with the Biden administration as it looks to tackle the issues of housing affordability and inventory in this country.”

The National Association of REALTORS® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

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