Pending home sales drop 1% in February, despite lower mortgage rates

Homebuyers signed 1 percent fewer contracts to buy existing homes in February compared with January, according to the National Association of Realtors’ pending home sales index. These contracts are a harbinger of closed sales one to two months later. Pending contracts were 4.9 percent lower tha a year earlier. “In January, pending contracts were up close to 5 percent, so this month’s 1 percent drop is not a significant concern,” said Lawrence Yun, chief economist for the Realtors. “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.”