The Zonda New Home Pending Sales Index came in at 168.3 for February, up 35% year over year and down 2.4% from January. This month’s report will be the last one for a few months that is not affected by the pandemic slowdown in March, April, and early May 2020.

Pending home sales trended above February 2020 in 22 of the report's top 25 markets, with the best performance recorded in Jacksonville, Florida; Cincinnati; and San Antonio. Despite the harsh winter weather over one week in February, contracts signed in top Texas markets remained positive for the month.

“Saving for a down payment is one of the biggest hurdles to becoming a homeowner,” says Zonda chief economist Ali Wolf. “For those lucky enough to keep their job over the past year, three important changes helped buyers get past that financial barrier: increased savings because of the pandemic, student loan forbearance, and stimulus checks.”

The PSI calculation includes both new-home orders and the average sales rate per community, which takes new-home supply out of consideration. However, both metrics can be negatively impacted if a builder intentionally caps sales—as many have in order to avoid pulling demand forward. The spread between these metrics shows which markets are most affected by new-home supply issues.

Jacksonville is both the strongest market for new-home sales and the hardest hit by short supply, with a 51.2% spread between its PSI components for new-home orders (32.3%) and average sales rate per community (83.5%).

“Seventy percent of builders are intentionally slowing or pausing sales to better align contracts with production capacity, which makes drawing market conclusions more difficult,” says Wolf. “The underlying demand in the housing market is still there, though, even as prices and mortgage rates rise.”