Pending home sales picked up the pace in March, but ongoing issues related to low inventory kept contract activity below year-ago levels, the National Association of REALTORS® reported Monday. NAR’s Pending Home Sales Index, a forward-looking indicator based on contract signings, inched up 0.4 percent to a reading of 107.6 in March. Despite the uptick, overall activity was down on an annualized basis for the third consecutive month.
“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” says NAR Chief Economist Lawrence Yun. “Steady price growth and the swift pace with which listings are coming off the market are proof that more supply is needed to fully satisfy demand. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy.”
Regionally, pending home sales dropped by the largest amount in the Northeast, falling 5.6 percent month over month in March and 8.1 percent year over year. Yun says multiple winter storms and colder than usual weather contributed to the decrease. Meanwhile, contract signings rose by 2.4 percent in the Midwest but are 6 percent below a year ago, and they were up by 2.5 percent in the South but are just 0.3 percent higher than a year ago. Pending home sales fell in the West by 1.1 percent month over month and are now 2.2 percent below a year ago.
“Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive,” Yun says. “That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in the coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern, and a growing share of would-be buyers—especially first-time buyers—will be left on the sidelines.”
Source: National Association of REALTORS®
