Pending home sales in February increased by 1.8 percent from January and declined 0.8 percent year-over-year, according to the National Association of Realtors (NAR) Pending Home Sales report.

Month-over-month, pending home sales rose in the Midwest (4.6 percent), South (2.7 percent) and West (0.9 percent), and declined in the Northeast (-3.6 percent). Year-over-year, pending home sales rose in the South (1.2 percent) and West (3.2 percent), dipped in the Midwest (-0.1 percent) and dropped in the Northeast (-12.1 percent).

“The slight gain in pending contracts appears to be driven by improved affordability conditions. However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates,” NAR Chief Economist Dr. Lawrence Yun said. “The Midwest — the most affordable region of the country — was the strongest performer in February. But the Northeast was held back by a combination of higher home prices and a shortage of supply.

“For first-time homebuyers, purchasing a home is not a snap decision,” Yun added. “It takes time to build credit, save for a down payment and fulfill existing rental lease agreements. Still, there is sizable pent-up demand that could be released into the market. Although job gains have been sluggish in recent months, there are still 6 million more jobs in the country than in the pre-COVID period.”

At the local level, several markets posted notable year-over-year gains in pending home sales. Among the 50 largest metro areas, the three markets that posted the biggest annual increases in pending home sales, according to data from Realtor.com Economics, were San Diego–Chula Vista–Carlsbad, Calif. (+13.5 percent), Jacksonville, Fla. (+12.1 percent) and San Jose–Sunnyvale–Santa Clara, Calif. (+10.6 percent).

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