The number of homes under contract to sell in February 2015 increased to their highest level since June 2013, thanks to big gains in the Midwest and West, according to the NATIONAL ASSOCIATION OF REALTORS®.

NAR’s Pending Home Sales Index measures the number of homes that have sold, but haven’t yet made it to the closing table. The index has increased year-over-year for six consecutive months and is above 100 — considered an average level of activity — for the 10th consecutive month.

NAR Chief Economist Lawrence Yun attributes the gains — and the prospect for an uptick in sales in the coming months — to an “improving labor market, mortgage rates hovering around 4%, and the likelihood of more renters looking to hedge against increasing rents.”

The one obstacle, especially for first-time buyers, is the relatively low number of homes for sale, he says.

“Several markets remain highly competitive due to supply pressures, and REALTORS® are reporting severe shortages of move-in ready and available properties in lower price ranges,” Yun says. “The return of first-time buyers this year will depend on how quickly inventory shows up in the market.”

So far the signs are promising for the spring market: The percentage of first-time buyers increased slightly for the first time in February since November 2014, up to 29% from 28% in January.

Pending Home Sales by Region

February 2015vs. February 2014
NationalUp 3.1%Up 12.0%
NortheastDown 2.3%Up 4.1%
MidwestUp 11.6%Up 13.8%
SouthDown 1.4%Up 10.8%
WestUp 6.6%Up 18.3%

Read more:
Follow us: @HouseLogic on Twitter | HouseLogic on Facebook

This content is not the product of the National Association of REALTORS®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.