Robert Gehl reports that home sales have skyrocketed – breaking an already rosy forecast in the month of February.
More Americans signed contracts to buy homes last month than at any time since 2010. The National Association of Realtors said Wednesday that its pending home sales index rose 5.5 percent in February to 112.3, the biggest jump since July 2010. The forecast was for only a 2.5 percent increase.
The increase shows that under the new Trump Administration, the housing market is gathering momentum. Warmer weather in February also helped with the start of the busy spring sales season, Bloomberg reports.
Lawrence Yun, the Realtors’ chief economist, suggested that a rising stock market had helped bolster confidence. “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt,” Yun said.
In addition, rising prices may have nudged some Americans into making offers for homes now out of fear of having to pay more if they wait.
The National Association of Realtors’ index of pending home sales rose 11.4 percent in the Midwest, 4.3 percent in the South, 3.4 percent in the Northeast and 3.1 percent in the West.
The U.S. housing market is looking strong despite a sharp rise in mortgage rates since the presidential election. The average on a benchmark 30-year fixed rate loan was 4.23 percent last week, up from 3.54 percent the week before the Nov. 8 vote.
Investors bid up rates in part out of expectation that President Donald Trump’s plans to cut taxes and increase spending on defense and infrastructure would raise economic growth and inflation.
The Realtors reported last week that sales of existing homes fell in February after having surged in January to the fastest pace in a decade. Sales were still up solidly from a year earlier.
The supply of homes for sale is tight and is helping to drive prices up and affordability down. The number of listings for sale has tumbled 6.4 percent over the past year to 1.75 million homes last month, up only slightly from a record low in January.
The supply of homes for sale has fallen on an annual basis for the past 21 months.
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