Pending Home Sales Rise 2% in February

Pending home sales in the U.S. rose 2% month-over-month in February 2025, marking the first increase in three months, though they remain 3.6% lower than the previous year. The National Association of Realtors reported a Pending Home Sales Index (PHSI) of 72, with significant gains in the South (6.2%) and slight increases in the Midwest (0.7%), while the Northeast and West saw declines. Chief Economist Lawrence Yun emphasized that despite this uptick, contract signings are still below historical averages and called for a meaningful decrease in mortgage rates to further stimulate demand. Current mortgage rates around 6.71% are seen as a barrier to significant improvement in sales, with forecasts indicating rates may remain above 6% for the next year. The NAR anticipates existing-home sales will rise by 6% in 2025, with a moderate increase in home prices due to greater supply. Overall, while there are signs of recovery, the housing market remains constrained by high borrowing costs.