Low inventory put a damper on the U.S. housing market last month and will hold down sales this spring, according to National Association of Realtors data cited by NBC News.
Fewer buyers signed contracts to purchase existing homes in February; pending home sales nationwide fell 0.4 percent from January — still up 8.4 percent from February 2012.
The number fell 2.5 percent in the Northeast and 0.3 percent in the South, but rose 0.4 percent in the Midwest and 0.1 percent in the West.
Realtors attribute the drop to a lack of supply that kept away many potential buyers but are seeing an above-average increase in for-sale listings in the coming few months.
“Only new home construction can genuinely help relieve the inventory shortage, and housing starts need to rise at least 50 percent from current levels,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement.
“Most local home builders are small businesses and simply don’t have access to Capital On Wall Street,” he said. “Clearer regulatory rules, applied to construction loans for smaller community banks and credit unions, could bring many small-sized builders back into the market.” [NBC News] —Christopher Cameron