pending home sales index

The index is down from 121.0 a year ago as higher mortgage rates and tight supplies cool the US housing market. This month, sales in the northeast, midwest and south all fell substantially while sales in the west edged higher. Overall, the south (by far) remains the hottest market.

“With inventory at an all-time low, buyers are still having a difficult time finding a home,” said Lawrence Yun, NAR's chief economist.

Alongside persistent supply constraints, Yun said house hunters are contending with a number of additional market issues, including escalating home prices and rising interest rates. Rates jumped by nearly a percentage point in January from December, further adding to monthly mortgage costs.

“Given the situation in the market – mortgages, home costs and inventory – it would not be surprising to see a retreat in housing demand,” Yun said.

On earnings calls, US home builders continued to emphasize optimism but shares in that sector are down sharply on rising interest rates.