Pending home sales off lows

NEW YORK (CNNMoney.com) -- The number of existing homes put under contract ticked up in February after hitting historic lows the previous month.

The National Association of Realtors reported that its monthly Pending Home Sales Index rose 2.1% to 82.1 from 80.4 in January.

The Midwest saw the largest gain of any regions, with pending home sales jumping 14.5%. The Northeast also recorded double-digit growth at 10.6%. The South inched up 4.4%, and the West dropped 13.5%.

"Pending home sales have a way to go for there to be a meaningful increase, but recent increases in shopping activity are hopeful indicators that we'll see additional sales gains," said NAR's chief economist, Lawrence Yun.

Housing affordability hit a record high in February. NAR's Housing Affordability Index jumped 0.9 percentage points to 173.5 in February, which is up 36.3 percentage points from a year ago. To determine affordability, the HAI incorporates the relationship between home prices, mortgage interest rates and family income.

According to the NAR report, a family earning the national median of $59,700 could afford a $285,600 home in February, presuming they devote no more than 25% of gross income to mortgage principal and interest. The national median price for existing single-family homes is $164,600.

Yun expects inventories of homes on the market to swell during the coming months if sellers follow the normal pattern of increased selling during the spring.

"But with the positive housing stimulus incentives now in place, we expect home sales to gain momentum in the second half of the year with first-time buyers absorbing a lot of the excess inventory," he said.

That should lead to more stable housing market conditions by the end of the year, NAR predicts.