Pending sales were lower last month but regions were split

The latest Pending Home Sales Index was 1% lower in February compared to January.

The reading of 101.9 was also 4.9% lower than a year earlier, marking the 14th consecutive month of year-over-year declines, the National Association of Realtors reported Thursday.

But NAR chief economist Lawrence Yun said that the decline is not a worry due to the strength of January’s pending contract signings which were close to 5%.

"As a whole, these numbers indicate that a cyclical low in sales is in the past but activity is not matching the frenzied pace of last spring," he said.

Across the four major regions, the South and West saw higher activity (1.7% and 0.5% month-over-month respectively) while the Northeast and Midwest declined (0.8% and 7.2% respectively).

But even in the West, the growth in pending sales was 9.6% lower than in 2018.

"There is a lack of inventory in the West and prices have risen too fast. Job creation in the West is solid, but there is still a desperate need for more home construction," added Yun.

Yun expects existing-home sales this year to decrease 0.7% to 5.30 million, and the national median existing-home price to increase around 2.7%. Looking ahead to 2020, existing sales are forecast to increase 3% and home prices also around 3%.