Pending home sales increased 6.1% in March compared with February but were down 0.6% compared with March 2024, the National Association of Realtors (NAR) reports.
It was the largest month-to-month increase since December 2023.
The Northeast experienced month-over-month losses in transactions, while the Midwest, South and West saw gains, which were most substantial in the South.
Year-over-year, contract signings grew in the Midwest but fell in the Northeast, South and West – with the Northeast undergoing the greatest decrease.
“Home buyers are acutely sensitive to even minor fluctuations in mortgage rates,” says Lawrence Yun, chief economist for NAR, in a statement. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential home buyers, fueled by ongoing job growth.”
Mortgage rates fell by around 20 to 30 basis points in March from the first two months of this year. The average mortgage rate was 6.65% in March, down from a 6.96% average in January and down from a 6.84% average in February, according to NAR.
“Consumers should note that the spring homebuying season typically brings in a surge of home buyers and sellers compared to the winter months,” Yun adds. “In March, signed contracts surged 34.1 percent from February based on non-seasonally adjusted raw data, reflecting a pattern consistent with previous years. In addition, inventory levels rose by 8.1 percent in March from the prior month, indicating a more dynamic housing-market environment.”
In a separate statement, Odeta Kushi, deputy chief economist for First American, points out that inventory levels are increasing, giving buyers more choices.
“Although pending home sales are slightly down compared with last year, the month-over-month bounce is a step in the right direction,” Kushi says. “Additionally, purchase mortgage applications also surged notably in March, reflecting growing buyer interest. Despite this cautious optimism, the recent increase in rates and ongoing economic uncertainty may temper this momentum.”
Photo: Gabrielle Henderson