Mortgage

U.S. pending home sales, a measure of contract signings on existing homes, gained momentum in February as some buyers raced ahead of climbing mortgage rates, Yahoo Finance reported. After dipping in January, the index for pending home sales rose 1.6% in February, according to data from the National Association of Realtors (NAR). The reading of 75.6 was the lowest for the month since NAR first began tracking the data in 2001. A reading under 100 indicates a weaker pace of pending contracts. The figure came in above the Bloomberg consensus of a 1.5% increase. Still, year-over-year contract signings were down 7%, the NAR found. The uptick in the index showed signs that buyers are coming to terms with elevated rates. A modest bump in new listings may have played a role in attracting buyers, as well as a sense of urgency to race against climbing rates. Challenges in inventory also remain a point of concern going into the spring. Pending home sales, which tend to lead existing home sales by a month or two, are still lagging in the most expensive regions of the country — a theme that may persist this spring.

Sales of new homes in the Northeast and Midwest plunged in February, helping to bring down the market overall across the country, as elevated mortgage rates dissuaded buyers from purchasing property, Newsweek reported. The Northeast registered a 31.5 percent nosedive in single-family home sales, while the Midwest saw a decline of 2.4 percent, contributing to a 0.3 percent of drop at the national level of 662,000, according to data from the U.S. Census Bureau and the Department of Housing and Urban Development. The South had more encouraging data, registering a 3.7 percent increase, while the West also saw positive numbers, up 2.3 percent for the month. Analysts blamed high mortgage rates for the disappointing numbers. Mortgage rates have been elevated, hitting a peak of 8 percent in the fall. Expectations that the Federal Reserve, which had raised borrowing costs to battle inflation, will cut rates had helped bring down the cost of home loans. But inflation has stayed higher than the central bank's target of 2 percent, leading investors to believe that borrowing costs could stay higher for longer. This dynamic has in turn contributed to a jump in mortgage rates in recent weeks.