(Bloomberg) -- Pending sales of previously-owned homes in the US recovered last month after declining at the start of the year, adding to evidence that the housing market is gradually improving.
An index of contract signings from the National Association of Realtors increased 1.6% to 75.6. The median estimate of economists surveyed by Bloomberg saw the reading rise by 1.5%.
“While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” NAR Chief Economist Lawrence Yun said in a statement on Thursday.
The nation's housing market has generally been on the upswing in recent months, pointing to a gradual acceptance of borrowing costs that are still double their levels at year-end 2021 but expected to decline at some point. A recent report showed listings may be starting to rise, with inventory reaching its highest level for a February since 2020.
Many in the housing industry are waiting for the Federal Reserve to lower interest rates following 11 hikes since spring 2022. However, some Fed officials have expressed a willingness to keep rates higher for longer to further bring down inflation. Atlanta Fed President Raphael Bostic reiterated this week he expects just one rate cut this year and Fed Governor Christopher Waller said there was no rush to reduce rates.
The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they're sold.
The Midwest was the main driver of the increase in pending sales, with a 10.6% jump. Contract signings in the South, the nation's biggest housing market, edged up 1.1%. They were little changed in the Northeast and dropped in the West.
“The high-cost regions in the Northeast and West experienced pullbacks due to affordability challenges,” Yun said.
--With assistance from Chris Middleton and Augusta Saraiva.
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