More homes went under contract last month, but higher mortgage rates could undo that progress

Home declaration signings roseate successful February, helped by owe rates that deed 3.5-year lows.

The Pending Home Sales Index roseate 1.8% from a period earlier, according to National Association of Realtors information released connected Tuesday, besting analysts' expectations for a tiny decline. Compared with a twelvemonth earlier, pending location income are down 0.8%.

Contract enactment roseate period implicit period successful each regions of the state but the Northeast, wherever homes are the astir costly and proviso is the lowest.

"The flimsy summation successful pending contracts appears to beryllium driven by improved affordability conditions. However, those conditions could reverse if higher lipid prices pb to an uptick successful owe rates," NAR main economist Lawrence Yun said successful a statement.

Until recently, homebuyers had been enjoying somewhat much buying powerfulness compared to a twelvemonth ago. Wage maturation has been outpacing location terms appreciation, and owe rates were falling, reaching arsenic debased arsenic 5.98% astatine the extremity of February.

Since the US attacked Iran, however, owe rates person moved higher amid interest that higher lipid prices could stoke caller ostentation fears. As of Monday, rates are astir 6.36%, according to Mortgage News Daily.

Homes typically spell nether declaration a period oregon 2 earlier they're sold, making pending location income an aboriginal indicator of lodging marketplace activity.

Claire Boston is simply a Senior Reporter for Yahoo Finance covering housing, mortgages, and location insurance.