Pending home sales down monthly but up yearly

Indications that the housing market is shaky but generally improving are continuing to roll in: February’s pending home sales – which represent signed contracts for home purchases – are up over the year but down from January, according to the National Assn. of Realtors.

The group’s index of sales agreements reached a reading of 96.5 in February – down 0.5% from January but more than 9% better than last February’s 88.4 level. January’s 97 rate was the highest since April 2010.

A reading of 100 or more is considered healthy. Pending home sales feature the contracts that are signed about one or two months before a purchase is finalized.

In the West, the index was at 99.3, down 2.6% from January and down 1.8% compared with February 2011. Pending sales were also down from January in the Northeast and the South but up 6.5% in the Midwest.

The data follow a pattern this month showing some oscillation in the housing industry.

On one hand, new home sales are down month to month even though prices are up. Inventory is expected to take longer to sell off.

But at the same time, ground-breakings are at a multi-year high, as is housing market confidence. Sales of previously owned homes had their best winter in five years. The unemployment rate is at its lowest point in three years.

“The spring home buying season looks bright,� concluded Lawrence Yun, chief economist for the realtors’ group.

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