The pending home sales index (PHSI) increased to 72.0, which is still below the base line of 100 that reflects the 2001 market activity. Overall, pending transactions declined by 3.6% a year ago compared to the same month, underlining constant structural obstacles in the housing market.
Horticulture rates remain significant obstacles
NAR Chief Economist Lawrence Yun emphasized the role of mortgage rates in reducing market speed. Despite the monthly growth, Yun said that “contract signatures remain below normal historical levels.” He said that the fall in mortgage rates would reduce the concerns of strength and reduce the hostage rate lock-in effect, which currently discourages the existing house owners from listing their qualities.
The average mortgage rates of NAR projects will be organized at 6.4% in 2025, which will limit the possibility of significant strength improvement. The group estimates the sale of the existing house to increase 6% next year, thanks 10% to the strong inventory levels with new house sales. The price of the national middle house in 2025 is expected to increase by 3% as more supply gradually enters the market.
Market forecast: neutral-to-bullish outlook
While the data of February indicates temporary stabilization, high lending costs and soft year-by-year comparisons, only suggests a slow recovery. However, strong performance in the south and improvement in new homes offers a creative background. If the Federal Reserve is less in rates according to expectations, the housing activity can achieve minor traction. Near-Term Outlook absorbed the neutral-by-bullish, with a potential casual contingency on hostage rate relief.
