2017.03.2910:05:00UTC+00U.S. Pending Home Sales Rebound Strongly In February

After reporting a steep drop in U.S. pending home sales in the previous month, the National Association of Realtors released a report on Wednesday showing that pending sales rebounded by much more than expected in the month of February.

NAR said its pending home sales index spiked by 5.5 percent to 112.3 in February from 106.4 in January. Economists had expected pending home sales to jump by 2.4 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

With the bigger than expected increase, the index surged up to its highest level since reaching 113.6 last April and is at its second highest level since May of 2006.

"Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country," said NAR chief economist Lawrence Yun.

He added, "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year."

The sharp increase by the index reflected growth in all four regions of the country, with pending home sales in the Midwest showing a standout 11.4 percent jump.

Pending home sales in the South also surged up by 4.3 percent, while pending sales in the Northeast and West climbed by 3.4 percent and 3.1 percent, respectively.

NAR said existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3 percent from 5.45 million in 2016.

The national median existing home price is expected to increase by around 4 percent this year after rising by 5.1 percent last year, the group added.