Pending Home Sales Jump

(Illustration courtesy of National Association of Realtors)

Pending home sales jumped 6.1% in March–the greatest month-to-month increase since late 2023– the National Association of Realtors reported Wednesday.

The Northeast experienced month-over-month losses in transactions, while the Midwest, South and West saw gains, which were most substantial in the South, the report said. Year-over-year, contract signings grew in the Midwest but fell in the Northeast, South and West – with the Northeast undergoing the greatest decrease.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – augmented 6.1% to 76.5 in March. Year-over-year, pending transactions lessened by 0.6%. An index of 100 is equal to the level of contract activity in 2001.

“Home buyers are acutely sensitive to even minor fluctuations in mortgage rates,” NAR Chief Economist Lawrence Yun said. Mortgage rates fell by around 20 to 30 basis points in March from the first two months of this year.

First American Deputy Chief Economist Odeta Kushi agreed, noting interest rate-sensitive buyers “seized the opportunity” presented by a 20-basis point dip in mortgage rates. “Higher inventory levels also offered buyers more choices,” she added. “Although pending home sales are slightly down compared with last year, the month-over-month bounce is a step in the right direction.”

Purchase mortgage applications also surged in March, reflecting growing buyer interest, Kushi said. “[But] despite this cautious optimism, the recent increase in rates and ongoing economic uncertainty may temper this momentum,” she cautioned.