The Index, an indicator of future home sales, dropped to 104.8 from a revised 105.2 in January, but is still at a recent high, second only to April 2010 when it reached 110.9 shortly before the end a government home buyer tax credit program. The index was 8.4 percent higher than a year earlier when it was 96.6 and February marked the 22nd month that contract activity increased on an annual basis.
On a regional basis the Index declined 2.5 percent in the Northeast but was 6.8 percent higher than a year earlier at 82.8. The Midwest was up 0.4 percent month over month to 103.6 and 13.2 percent year over year. Pending home sales in the South slipped 0.3 percent to an index of 118.8 in February but are 12.1 percent above February 2012. In the West the index increased 0.1 percent in February to 101.4 but is 0.8 percent below a year ago.
The National Association of Realtors expects existing-home sales to rise about 7 percent in 2013 to approximately 5 million sales, which is near the current level of activity. The volume of home sales appears to be leveling off with the quality inventory problems, and the leveling of the index means little change is likely in the pace of sales over the next couple months.
Because of limited inventory of quality homes, NAR also expects the median existing home price to increase about 7 percent, while they expect mortgage nterest rates to slowly move up to closer to 4% by the end of the year.