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CNBC: Pending Home Sales Rise Heading into the Spring Selling Season

As the housing market suffers from a lack of inventory, there’s more activity among potential buyers.

As the spring selling season approaches, the housing market is warming up. According to a new monthly index from the National Association of Realtors cited by CNBC, signed sales contracts to buy existing homes jumped 5.5 percent in February. That’s 2.6 percent higher compared to the same month the year before.

The spike in pending home sales comes as the U.S. housing market has suffered from a severe lack in inventory. And despite rising activity among potential buyers, the NAR warns that it might be difficult to hold February’s pace. New supply isn’t expected to keep up with demand, and entry-level home buyers are going to be hit the hardest when it comes to the variety of homes available for purchase.

“The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy,” said the National Association of Realtors’ chief economist Lawrence Yun in an interview with CNBC. “Affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply. How much new and existing inventory there is on the market this spring will determine if sales can reach their full potential and finally start reversing the nation’s low homeownership rate.”

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