Pending Home Sales Rise 3.4%

(Illustration courtesy of the National Association of Realtors)

Pending home sales climbed 3.4% in March, the National Association of Realtors reported.

The Northeast, South and West posted monthly gains in transactions while the Midwest recorded a loss, according to the Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings. Year-over-year, the Northeast and South registered decreases but the Midwest and West improved.

The PHSI increased to 78.2 in March. Pending transactions were up 0.1% compared to one year ago.

“March’s Pending Home Sales Index – at 78.2 – 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,” NAR Chief Economist Lawrence Yun noted. He suggested meaningful gains will only occur with declining mortgage rates and rising inventory.

NAR forecasts existing home sales will rise by 9% in 2024 to 4.46 million (from 4.09 million last year) and another 13.2% (from 2024) in 2025 to 5.05 million. It forecasts housing starts will rise by 1.2% in 2024 to 1.43 million (from 1.41 million in 2023) and 4.9% to 1.5 million in 2025 (from 2024).

“Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it’s inevitable that sales will rise in coming years,” Yun said. “Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location.”