Home Sales Still on the Rise, but Year-Over-Year Gains Slowing Down
According to the National Association of Realtors, its Pending Home Sales Index went up by 3.5% in February. This soundly reverses the disappointing decline reported last month and puts current rates of home sales up to its highest levels in seven months. These figures are based only on signed home purchase contracts, but such contracts generally result in transactions closing within about two months and are a fairly reliable wan to predict upcoming home sales.
The bad news is that the gains in home sales seem to be shrinking. Compared to February of 2015, it would appear that sales are up by only 0.7%. Though year-over-year sales have been up for over the last eighteen months, these most recent figures represent the smallest annual gain.
A silver lining in these weakening sales is that we are looking at a similar slow down in price appreciation. Home prices were up by 4.4% last month. Though this is still outpacing wage growth and doing little to counteract rising mortgage rates, it is far more favorable than the 8.1% increase experienced in January.
