Pending home sales last month zoomed to the highest level in nearly a year, according to the National Association of REALTORS®’s Pending Home Sales Index, a forward-looking indicator based on contract signings. Signings climbed 1.4 percent nationwide in March to an index reading of 110.5, its highest reading since May 2015.
Lawrence Yun, NAR’s chief economist, says the pending home sales increase marks a solid beginning to the spring buying season.
“Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” Yun says. “This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth.”
Yun also notes the limited number of new single-family homes being built in recent years is starting to impact some top job-producing markets, where limited inventories of homes for sale are driving up prices.
“Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38 percent in the past three years,” says Yun. The West was the only major region across the U.S. to see a decline in contract activity last month. Closed sales in the region are also below last year’s pace.
Regionally, pending home sales across the country in March broke out as:
- Northeast: Pending home sales rose 3.2 percent to 97 in March and is 18.4 percent above a year ago.
- Midwest: Pending home sales were up slightly by 0.2 percent to 112.8 in March, and are 4 percent above year ago levels.
- South: Pending home sales increased 3 percent to an index of 125.4 in March but remain 0.6 percent lower than last March.
- West: Pending home sales dropped 1.8 percent in March to a reading of 95.3, and are now 7.9 percent below a year ago.
“Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission”