Pending home sales plunged in California last month from a year earlier, as would-be buyers struggled with high prices.
The California Assn. of Realtors said Tuesday its pending sales index fell 12% from February 2013. The index has now fallen by double-digits for six straight months.
Home prices shot up last year, in part because rock-bottom mortgage rates juiced demand. But rates climbed in the second half of the year, sapping an urgency to buy. Higher prices and rates have now handcuffed many buyers.
But the Realtor group said demand is starting to rebound. Its pending sales index, which reflects contracts signed but not closed, rose 14.2% from January, slightly higher than the average 13% increase.
The trade group said it expects the year-over-year declines to taper in coming months as the spring home buying season kicks into overdrive.
The supply of homes for sale increased in February, although it still remains tight. More homes should come on the market this spring, potentially easing price pressure if demand doesn’t explode.
Prices have already started to slow after a torrid rebound early in 2013.
A separate report Tuesday showed home prices in Los Angeles and Orange counties fell 0.3% in January from December, according to the S&P/Case-Shiller index.
Prices rose 18.9% from a year earlier. That was the smallest annual increase since April.