Data from the National Association of Realtors reveals that new contracts signed for homes remained flat in February – a indicator that the market is picking up competitiveness.
According to the Association, the pending home sales index fell 0.4% from the prior month but was up 8.4% over the year.
“New supply is unlikely to come from existing housing stock anytime soon,” said Lawrence Yun, chief economist for the real estate group.
“Only new home construction can genuinely help relieve the inventory shortage,” he added.
The index remained steadily at 104.8. The index is based on national contract activity, and a reading of 100 is equal to the average contract level during 2001, which is considered a year with normal market activity.
A lack of inventory has led to bidding wars in many markets as foreclosures have waned and cheap financing has lured a host of new buyers into the market. The competitiveness has resulted in rising prices.
