Pending home sales in March were up by 3.4% from February and up by 0.1% from one year earlier, according to new data from the National Association of Realtors (NAR).
The trade group’s Pending Home Sales Index (PHSI) increased to 78.2 in March; an index of 100 is equal to the level of contract activity in 2001. NAR Chief Economist Lawrence Yun stated March’s PHSI “marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout. Meaningful gains will only occur with declining mortgage rates and rising inventory.”
On a regional measurement, the PHSIs for the Northeast, South and West posted monthly gains in transactions while the Midwest recorded a loss. Year-over-year, the Northeast and South saw declines while activity was up in the Midwest and West.
“Home prices rising faster than income growth is not healthy and adds challenges for first-time buyers,” added Yun. “Inventory will gradually rise from recent growth in home building. Additionally, many sellers who delayed listing in the past two years will start putting their homes on the market to move to a different home that better fits their new life circumstances – such as changes in family composition, jobs, commuting patterns and retirees wanting to be closer to their grandkids.”
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