Economic data revealed a rise in pending home sales in the United States rose in February, contrary to expectations, reaching their highest level since last August—a new sign of stability in the U.S. housing market after a turbulent year.
The National Association of Home Builders" index tracking signed contracts for the purchase of existing homes rose by 0.8% last month to 82.83 points, its highest level since last August, while the average forecast of analysts surveyed by Bloomberg News had pointed to a 3% decline in the index.
It should be noted that pending sales are those in which a preliminary contract is signed between the two parties without the transaction being finalized, which typically takes place within 4 to 6 weeks of the contract being signed.
Bloomberg reported that rising sales are a sign that the U.S. housing market may be recovering after its rapid decline last year due to higher mortgage costs resulting from rapidly rising U.S. interest rates aimed at curbing inflation, which reached its highest levels in more than 40 years.
Mortgage rates fell last week to their lowest levels in six weeks, leading to increased demand for homes.
Mortgage rates are likely to continue falling if the ongoing banking crisis leads to a decline in yields on U.S. Treasury bonds, while the U.S. Federal Reserve (the central bank) has signaled that it is nearing the end of its interest rate hikes.
