Pending home sales lag 2025 despite February uptick

"Even as mortgage rates dipped below 6% last month, ongoing economic uncertainty, affordability constraints and a dearth of new listings kept many home shoppers on the sidelines. When 2026 started, there was a lot of optimism for a strong spring housing market. At this point, the start of the spring homebuying season is delayed, with sellers holding off on putting their homes on the market and buyers questioning whether it is the right time for them to buy."

"The slight gain in pending contracts appears to be driven by improved affordability conditions. However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates. If the conflict with Iran is prolonged, the spring housing market may not be as robust as economists were initially predicting."

"Regionally, pending home sales rose month-over-month in all regions except for the Northeast, which recorded a 3.6% monthly decline. In contrast, pending home sales were up 4.6% in the Midwest, 2.7% in the South and 0.9% in the West. The Midwest—the most affordable region of the country—was the strongest performer in February."

Pending home sales increased slightly due to improved affordability conditions, though gains remain fragile amid economic uncertainty and geopolitical risks. Mortgage rates dipped below 6%, yet buyers and sellers remain hesitant. The anticipated strong spring housing market has been delayed, with sellers reluctant to list and buyers questioning purchase timing. Regional performance varies significantly: the Midwest led with 4.6% monthly growth as the most affordable region, while the Northeast declined 3.6% monthly due to high prices and limited supply. Year-over-year trends show the South and West gaining while the Northeast and Midwest lag. Prolonged Iran conflict could further dampen spring market expectations.

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