Pending home sales were back on track last month, reversing course after last month’s drop. Three of the four major regions saw an uptick in contract signs in March, the National Association of REALTORS® reported Tuesday.
NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.8 percent last month over February, and contract signings reached a reading of 105.8. Still, contract signings are down 1.2 percent year over year, marking the 15th consecutive month of annual decreases.
Pending home sales have been volatile in recent months. However, NAR’s Chief Economist Lawrence Yun predicts the numbers to begin climbing more consistently.
“We are seeing a positive sentiment from consumers about homebuying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable,” Yun says.
Sales activity in the West has risen at a relatively stable rate for the past five consecutive months. The region saw a “significant spike” in activity in March, Yun notes. “Despite some affordability issues in the West, the numbers indicate that there is a reason for optimism,” he says. “Inventory has increased too. These are great conditions for the region.”
But overall, sales activity continues to “underperform” across the country, says Yun.
“In the year 2000, we had 5 million home sales,” he says. “Today, we are close to that same number, but there are 50 million more people in the country. There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”
