Investing.com - Contracts to buy previously-owned homes fell unexpectedly in February, adding a downbeat note to a real estate market plagued by mixed signals.
The National Association of Realtors said its pending home sales index, which measures signed contracts for homes where transactions have not yet closed, fell 1.0% to a reading of 101.9.
That was compared to a gain of 4.3% in January.
Economists had forecast pending home sales rising 0.1% last month.
NAR chief economist Larry Yun downplayed the reading, saying that the 1% drop after the surge in January was “not a sign of concern”.
"As a whole, these numbers indicate that a cyclical low in sales is in the past, but activity is not matching the frenzied pace of last spring,” he added.
Housing data has been painting a volatile mixed picture in recent months, with housing starts tumbling in February after a surge at the beginning of the year.
Yet sentiment among U.S. homebuilders held steady in March, sustaining a rebound from a three-year low on improvement in sales and a brighter outlook for the next six months, according to a survey by the National Association of Home Builders released last week.
Analysts expect the recent promise from the Federal Reserve to be patient with rate hikes will put a cap on mortgage rates, coupled with a solid labor market and increasing incomes to improve affordability for would-be homebuyers.
"The expectation is no change at all in the current monetary policy, which will help mortgage rates stay at attractive levels," Yun said.