In March, a surge in homebuyer activity propelled pending sales to their highest level in a year.
The index for pending home sales, reflecting contract signings on existing homes, surged by 3.4% in March, according to data from the National Association of Realtors released on Thursday. With a reading of 78.2, it marked the most robust performance in a year, though narrowly. A reading below 100 indicates a sluggish pace of pending contracts. “Significant gains hinge on declining mortgage rates and rising inventory,” emphasized Lawrence Yun, NAR’s chief economist.
This figure notably surpassed the Bloomberg consensus of a 0.4% month-over-month increase and a 3% annual decline. However, contract signings were up by only 0.1% year-over-year, signaling minimal improvement, according to NAR.
Nevertheless, the association projects 4.46 million existing-home sales in 2024, reflecting a 9% increase from 2023.
The upswing in the index, a leading indicator of the housing market’s health, underscores the prevailing trend: Demand continues to outstrip housing supply, with buyers eager to purchase before further price or rate hikes.
However, sales activity remains subdued by historical standards.
“Home sales have stagnated at 30-year lows, yet with 70 million more Americans inhabiting the country compared to three decades ago, sales are poised to rise in the forthcoming years,” remarked Yun. “Inventory will steadily expand through heightened home construction, and various life-changing events will necessitate people to trade up, downsize, or relocate.”
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