Fewer Available Listings Leads To Slower Sales
The National Association of Realtors' Pending Home Sales Index measures the number of contracts to buy homes signed each month. Because it tracks signings and not closings, the index is a good indicator of future sales of existing homes. In February, it was down 4.1 percent, marking the fourth consecutive month transactions fell. Lawrence Yun, NAR's chief economist, says the reason for the decline is simple. “Pending transactions diminished in February mainly due to the low number of homes for sale,” Yun said. “Buyer demand is still intense, but it's as simple as 'one cannot buy what is not for sale.'” Fortunately, there are expectations that the inventory of homes for sale will improve this year, which will help slow price increases and offer buyers more options. However, those improvements will be gradual and home buyers in the coming months should still be prepared for a competitive market, where good listings attract multiple interested buyers.