What did pending home sales look like in February?
Pending home sales increased some in February in two regions across the nation from the previous month, particularly in the South, the National Association of Realtors® (NAR) said in a report released today.
The NAR’s chief economist expressed optimism that sales will improve heading into the spring homebuying season as mortgage interest rates drop and more properties come onto the market.
"A meaningful decline in mortgage rates would help both demand and supply – demand by boosting affordability and supply by lessening the power of the mortgage rate lock-in effect," NAR Chief Economist Lawrence Yun said.
"Considering the Federal Reserve's recent forecast for slower economic growth, we expect mortgage rates to slide moderately lower," Yun said in the NAR report.
Pending home sales are indicators of the direction of the housing market in general based on purchase contracts signed for homes for sale.
Which regions showed changes in pending home sales?
Two of four regions the NAR tracks in the U.S. showed increases in pending sales in February from the previous month while they declined in two other regions, though the declines were relatively small.
- Signed contracts in the South increased the most, up 6.2% from the previous month.
- Pending sales in the Midwest increased 0.7% from the previous month.
- The Northeast experienced a 0.9% decrease in pending sales from last month.
- Pending sales in the West dropped 3% from the previous month.
Other signals in the economy could also put more homes onto the market and make them more affordable, the NAR report indicated.
“Home price growth will moderate due to more supply coming onto the market," Yun added in the NAR report. "Having income and wages rise faster than home prices are welcome to improve affordability."
Wintertime and the holiday season tend to be slower periods for home sales and contract signing could pick up as mortgage interest rates decline and the weather warms up heading into spring.
Did mortgage rates show any change?
According to data from Freddie Mac, the 30-year fixed rate mortgage averaged 6.67% as of March 20*. That’s up from 6.65% one week ago but down from 6.87% one year ago.
Continued cooling of mortgage rates will likely be a welcome sign to prospective homebuyers. A dip in mortgage rates could also signal movement in the housing market as we head into the traditional spring homebuying season.
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- National average rates from Freddie Mac as of March 20, 2025, are not advertised rates from OriginPoint.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.
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