WASHINGTON–Signed sales contracts to buy existing homes were up 5.5% in February, the second fastest pace of growth in more than a decade, according to the National Association of Realtors.
"Buyers came back in force last month as a modest, seasonal uptick in listings was enough to fuel an increase in contract signings throughout the country," said Lawrence Yun, chief economist for the NAR, in a statement. "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year."
Throwing water on the pace of home sales, however, is a lack of supply to keep up with demand. This is especially true of entry-level homes, which are also selling at their fastest pace in more than two decades, the NAR reported.
"The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy," Yun continued in a statement. "Affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation's low homeownership rate.”