It’s been a rough year for pending home sales, but March finally brought some good news to the beleaguered housing stat.
Pending home sales reversed a longstanding trend of declines in March, posting their first increase in nine months, according to the latest analysis by the National Association of Realtors (NAR).
The Pending Home Sale Index, which measures contract signings, rose 3.4 percent from February to March, though it was still 7.9 percent below March 2013’s level.
National Uniformity in Pending Home Sales
Interestingly, the nation’s disparate regions were quite consistent with the overall averages:
- Pending home sales in the Northeast were up 1.4 percent monthly but down 5.9 percent year, while in the Midwest, they were down 0.8 percent monthly and 10.1 percent yearly.
- Contract signings were a bit more rigorous in the South and West, where pending sales were up monthly by 5.6 and 5.7 percent, but down yearly by 5.3 and 11.1 percent, respectively.
- Existing-home sales, based on the weaker contract signing thus far, are estimated to reach 4.9 million this year, down from 5.1 million in 2013.
A New Leaf for Pending Home Sales?
Do March’s encouraging numbers suggest that we’ve finally turned the corner for pending home sales? Lawrence Yun, NAR’s chief economist, said that with how low sales fell during the wintry months, an increase was all but inevitable.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” Yun said. “Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
Of course, the biggest factor on pending home sales remains mortgage rates, and with no action from the Federal Reserve expected, it’s likely that rates will continue to increase through 2014.
For a quick refresher on just how influential mortgage rates can be on homebuying patterns, check out our graph below: