Pending us sales hit 21-month high

The Midwest saw the strongest rise in sales in February Photo: MPBecker

Pending home sales rose 3.1 per cent in February 2015 compared to the previous month, the NAR's latest index. The figure is 12 per cent higher than February 2014, marking the six month in a row that annual growth has increased. It is also the higher number recorded since June 2013.

Lawrence Yun, NAR chief economist, says demand appears to be strengthening as we head into the spring buying season. Indeed, the share of first-time buyers also increased for the first time in February since November 2014, up to 29 per cent from 28 per cent in January.

"Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 per cent and the likelihood of more renters looking to hedge against increasing rents," he says.

"These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale."

The Midwest was the primary driver of activity, with the sales index leaping 11.6 per cent month-on-month to become 13.8 per cent higher year-on-year. The PHSI in the Northeast, on the other hand, fell 2.3 per cent to 81.7 in February, although it is 4.1 per cent above a year ago.