• Sales are constrained by limited supply.

• Harsh winter weather likely also constrained sales.

Pending home sales fell 10.6% (-0.5% y/y) during February following a 2.4% January drop, revised from -2.8%. According to the National Association of Realtors (NAR), recent sales weakness reflected a record low number of homes on the market.

The weakest region was the South where sales fell 13.0% (+2.9% y/y). Sales in the Midwest declined 9.5% (-6.1 y/y) while sales in the Northeast weakened 9.2% (-3.9% y/y) after a sharp January fall. In the Western region of the country, pending home sales fell 7.4% (+1.9% y/y), about as they did in January.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, analogous to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001, and are available in Haver's PREALTOR database. Mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.