Pending home sales in the U.S. showed an unexpected decrease in the month of February, according to a report released by the National Association of Realtors on Monday, although pending sales remain notably above the pattern in the first half of last year.
NAR said its pending home sales index fell by 0.5 percent to a reading of 96.5 in February after rising by 2.0 percent to a reading of 97.0 in January. The drop surprised economists, who had expected the index to increase by 1.0 percent.
A pending 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.
The unexpected decrease by the pending home sales index in February came after it reached its highest level since April of 2010 in January.
NAR noted that the pending home sales index remains 9.2 percent above February of 2011, when it came in at a reading of 88.4.
Lawrence Yun, NAR chief economist, said, "The spring home buying season looks bright because of an elevated level of contract offers so far this year."
"If activity is sustained near present levels, existing-home sales will see their best performance in five years," he added. "Based on all of the factors in the current market, that's what we're expecting with sales rising 7 to 10 percent in 2012."
The monthly drop in pending home sales reflected weakness in the South and the West, where pending home sales fell by 3.0 percent and 2.6 percent, respectively.
While pending home sales in the Northeast also edged down by 0.6 percent, pending sales in the Midwest jumped by 6.5 percent.
Last Wednesday, NAR released a separate report showing a modest pullback in existing home sales in the month of February.
NAR said existing home sales slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January. Economists had expected existing home sales to edge up to 4.61 million from the 4.57 million that had been reported for the previous month.
The modest drop in existing home sales in February came after sales surged up by an upwardly revised 5.7 percent in January. The revised figure for January represented the highest level since May of 2010.
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