WASHINGTON — More Americans signed contracts to buy homes in February, with purchases surging in the Midwest ahead of the traditional spring buying season.
The National Association of Realtors said Monday that its seasonally adjusted pending home sales index rose 3.5 percent to 109.1, rebounding from a 3 percent decline in January. The index has reached its highest level since July 2015.
Pending sales increased at a faster pace in the Charlotte area, rising nearly 14 percent to 3,814 in February from 3,356 in January. The number of signed contracts grew 22 percent last month when compared with February 2015, according to the Charlotte Regional Realtor Association.
The increase in signed contracts occurred last month despite a shortage of homes on the market. The gain suggests a strong start to the spring home buying season, after some recent reports have hinted at a possible slowdown as rising prices have hurt affordability.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.
Regionally, signed contracts climbed 11.4 percent in the Midwest, with more modest gains in the South and West. In the Northeast, the number of contracts dipped 0.2 percent.
Last week, NAR reported that completed sales tumbled 7.1 percent in February to a seasonally adjusted annual rate of 5.08 million. That drop-off came after relatively healthy sales levels in December and January, which were due in part to a new federal regulation that had delayed closings in November.
Completed sales were up, however, in the Charlotte area. February home sales increased 15 percent from January, when the CRRA said activity was particularly hard-hit by inclement weather, a slowdown due to the holidays, and low inventory. There were 2,345 properties sold in February, up from 2,039 in January.
Local sales were up 1.4 percent from a year ago, when 2,312 homes sold.
Monday’s pending sales report indicates that demand remains solid even though home prices are rising and buyers have a limited number of listings from which to choose.
Nationally, the median home sales price was $210,800 in February, a 4.4 percent increase from a year ago.
The CRRA said that in the Charlotte area, the median sales price grew 2.2 percent last month to $182,000 from $178,000 in February 2015.
February listings across the United States in February fell 1.1 percent from a year ago. Many homeowners are hesitant to sell because they would need more equity to cover a down payment for upgrading to a new house. Investors have also turned many homes into rentals, further depriving the market of properties for sale.
The U.S. had a 4.4-month supply of homes for sale last month, down from a 4.6-month supply a year earlier.
In the Charlotte region, inventory was even scarcer. Last month, the area had a mere 2.8-month supply of homes for sale, or 9,935 properties.
In February 2015, inventory was at 4.3 months, or 13,505 properties. That was still well below the six-month supply considered to indicate a balanced market.
– Staff writer Roberta Fuchs contributed to this report