Pending home sales fell for the eighth straight month, down 0.8% from the downwardly revised January report and down 10.5% from February 2013, according to the index from the National Association of Realtors.
NAR’s pending sales index is an indicator of closings that usually happen within three months.
"Contract signings for the past three months have been little changed, implying the market appears to be stabilizing," said Lawrence Yun, chief economist for NAR. "Moreover, buyer traffic information from our monthly Realtor survey shows a modest turnaround, and some weather delayed transactions should close in the spring."
Existing home sales have been down since September 2013, with buyers facing the challenges of an increasing affordability gap as investors have driven up prices and lending requirements have tightened.
“Upon first glance, it may seem high that a quarter of all ZipRealty home sales closed without financing in 2012 and 2013,” said ZipRealty CEO and president Lanny Baker. “But based on our own internal analysis and data from the National Association of Realtors, the percentage of all-cash real estate transactions may actually be moderating. Nationwide, the percentage of all-cash real estate transactions reached a five-year high in 2010 at 27%, and the percentage of all-cash property sales has slowly declined or flattened every subsequent year.”
All-cash transactions accounted for 20% of the residential real estate market in 2009, and 25.6% of the market in 2011, NAR reports.
According to ZipRealty’s analysis, in 2013 26% of all the real estate transactions closed by ZipRealty agents were purchased with cash, while 25% of the homes purchased through ZipRealty agents were acquired with cash.
Mortgage applications dropped 3.5% from one week earlier, according to data from the Mortgage Bankers Association’s weekly applications survey for the week ending March 21, 2014. Refinance applications dropped 8%. This is the second week in a row for declines after a spike of almost 10%. Apps fell last week 1.2% but were revised upward to 0.2%.
Regionally, the pending home sales index fell 2.4% in the Northeast month-to-month and is 7.4% below a year ago. In the Midwest the index rose 2.8%, but is 8.5% lower than February 2013.
Pending home sales in the South fell 4%, and are 9.3% below a year ago – in this the largest housing market. The index in the West increased 2.3%, but is 16.5% below February 2013.