Pending home sales lose momentum in March
Reversing a positive trend from the previous three months, pending home sales declined in March by 5.2%, according to a report from the National Association of Realtors® (NAR). Three of the four regions saw decreases from February, and all four regions saw fewer contract signings than a year ago.
"The lack of housing inventory is a major constraint to rising sales," said Lawrence Yun, chief economist at NAR. "Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally."
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The Pending Home Sales Index is a forward-looking metric of sales based on contract signings, equates an index of 100 to the level of contract activity in 2001. All four major regions fell below that in March, though contract activity in the South improved to almost reach the 100 mark.
- Northeast: down 8.1% to 66.6, down 24.3% from March 2022
- Midwest: down 10.7% to 75.7, down 21.5% from March 2022
- South: up 0.2% to 99.6, down 19.8% from March 2022
- West: down 8.0% to 59.4, down 32.2% from March 2022
NAR has provided economic forecasts to go along with this report and sees reasons for optimism for the second half of the year. They are particularly bullish on a housing market recovery in 2024.
Newly constructed home sales
Median existing home price
"Sales in the second half of the year should be notably better than the first half as job gains continue and more favorable mortgage rates are expected," says Yun. "Sales of new homes are already matching 2019 pre-COVID activity and are expected to increase in 2023, largely due to plentiful inventory in this segment of the market."
It’s incredibly hard to predict what’s going to happen in the housing market, so it’s important to work with experts who see what’s happening everyday. Talk with an expert loan officer to help you understand the latest breaking news and make the most of the current environment.