US pending home sales rebound sharply

Pending home sales in the US rebounded sharply in February, after showing a decline in the previous two months.

The pending home sales index rose 2.1 percent to 90.8 from 88.9 in January, the National Association of Realtors said on Monday. Markets had the index to increase slightly by 0.3 percent in the month.

“Pending home sales have trended up very nicely since bottoming out last June, even with periodic monthly declines. Contract activity is now 20 percent above the low point immediately following expiration of the home buyer tax credit,” Lawrence Yun, chief economist, NAR.

Existing home sales in the US fell more than expected in February, indicating an uneven recovery in the housing industry. Sales of previously-owned homes dropped 9.6 percent to 4.88 million in February compared with an upwardly revised figure of 5.40 million in January, NAR said on last Monday.

“We may not see notable gains in existing-home sales in the near term, but they’re expected to rise 5 to 10 percent this year with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who’ve been on the sidelines,” Yun said.

Despite mortgage rates being low, the people in the US find it hard to buy homes due to high jobless rate and stricter lending norms.

Analysts said that housing demand in the nation will remain weak until the labor market shows sustained improvement.