This story was originally published in Builder.

Pending home sales rebounded sharply in February to the highest level in nearly a year and second-highest level in more than a decade, the National Association of Realtors reported Wednesday. All major regions saw a notable hike in contract activity last month.

The Realtor's Pending Home Sales Index jumped 5.5% to 112.3 in February from 106.4 in January. Last month’s index reading is 2.6% above a year ago, is the highest since last April (113.6) and the second highest since May 2006 (112.5).

The PHSI in the Northeast rose 3.4% to 102.1 in February, 6.6% above a year ago. In the Midwest the index jumped 11.4% to 110.8 in February but is still 0.6% lower than February 2016. Pending home sales in the South climbed 4.3% to an index of 127.8 in February and are now 4.2% above last February. The index in the West increased 3.1% in February to 97.5, but is still 0.2% higher than a year ago.

Said Lawrence Yun, NAR chief economist, “Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country. The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.”

Added Yun, “Last month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.”

Looking ahead to the busy spring months, Yun said he expects to see continued ebbs and flows in activity as new supply struggles to replace listings that are going under contract at a very quick pace. This is especially the case at the lower- and mid-market price ranges, where choices are minimal and prices are being bid higher by multiple offers.

“The homes most buyers are in the market for are unfortunately the most difficult to find and ultimately buy,” said Yun. “The country’s healthy labor market is translating to greater job security, but 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 home-ownership rate.”

Existing-home sales are forecast to be around 5.57 million this year, an increase of 2.3% from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 4%. In 2016, existing sales increased 3.8% and prices rose 5.1%.

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