Pending home sales increased in March and remain above year-ago levels, but contract activity in recent months shows only modest movement, according to the National Association of REALTORS®.
The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.5 percent to 105.7 in March from a downwardly revised 104.1 in February, and is 7.0 percent above March 2012 when it was 98.8. Pending sales have been above year-ago levels for the past 23 months; the data reflect contracts but not closings.
Lawrence Yun, NAR chief economist, says the market appears to be leveling off. “Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses,” he says. “Job additions and rising household wealth will continue to support housing demand.”
The PHSI in the Northeast was unchanged at 82.8 in March and is 6.3 percent higher than March 2012. In the Midwest the index increased 0.3 percent to 103.8 in March and is 13.7 percent above a year ago. Pending home sales in the South rose 2.7 percent to an index of 120.0 in March and are 10.4 percent higher than March 2012. In the West the index increased 1.5 percent in March to 102.9 but is 4.3 percent below a year ago.
Total existing-home sales are projected to increase 6.5 to 7 percent over 2012 to nearly 5 million sales this year, while the national median existing-home price is forecast to rise about 7.5 percent.