The National Association of Realtors indicated that pending sales of existing homes during February edged up 2.1% after the sharp 7.7% decline during January. The decline left sales so far this year 6.4% below the 2008 average after last year's 9.5% decline. Consensus expectations had been for a 0.5% February slip.

The home sales figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed. The series dates back to 2001.

Lower prices continued to bolster home sales. The median sales price of an existing home rose in February (-15.5% y/y) after seven straight months of decline. Prices were down by one quarter from their peak during June 2007. Lower prices combined with lower interest rates to significantly raise the affordability index of a home by 26.5% year-to-year and by three quarters from the 2006 low. The latest level was a record high for the series which extends back to 1970.

Weak home sales are encouraging potential sellers to keep their homes off the market. The Realtors Association indicated in an earlier report that the number of homes on the market and available for sale fell by 5.5% during February versus one year earlier.

At the current sales rate there was a 9.7 months' supply of homes on the market and there was a 10.4 months' supply during all of last year, up from the 8.9 months supply during 2007 and 6.5 months during 2006. For single family homes, there was a 9.1 months' supply in February versus a full-year figure of 10.0 months during 2008.

The pending home sales data are available in Haver's PREALTOR database. The number of homes on the market and prices are in the REALTOR database.