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Pending Home Sales Report Tops Expectations, Rising Narrowly

Pending sales of existing U.S. homes rose only narrowly in February as bad weather and weakness in the subprime lending sector put a crimp on the housing market, a real estate agents' trade association said on Tuesday.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in February, rose 0.7% to 109.3 from a downwardly revised level of 108.5 in January.

Wall Street analysts polled ahead of the realtor report were expecting the index to come in at 108.2.

Higher delinquencies among subprime borrowers with damaged credit will put downward pressure on homes sales this year, said David Lereah, NAR's chief economist.

"Problems in the subprime mortgage market will become more apparent over time, and they will modestly depress the overall level of improvement in existing-home sales we expect as the year progresses," Lereah said.

Poor February weather was probably also a factor in Monday's flat number but the pending home sales figure has largely held steady since July, he said.

Jon Basile, an economist with Credit Suisse of New York, said Monday's data "gives a feel that existing home sales has stabilized because they are higher than the lows of last year.

At the very least, housing demand is not getting any worse."

A sale is listed as pending when the contract has been signed but the transaction has not been closed. Sales are usually finalized within one or two months of signing.