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 (NAR).
The group's Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 1.5% to 105.7 in March from a downwardly revised 104.1 in February, and is 7% above March 2012, when it was 98.8.
Pending sales have been above year-ago levels for the past 23 months, according to NAR.
‘Contract activity has been in a narrow range in recent months – not from a pause in demand, but because of limited supply,’ explains Lawrence Yun, NAR's chief economist. ‘Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses. 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% higher than in March 2012. In the Midwest, the index increased 0.3% to 103.8 in March and is 13.7 percent above the year-ago level. Pending home sales in the South rose 2.7% to an index of 120 in March. In the West, the index increased 1.5%.
Also, NAR says total existing-home sales are projected to increase 6.5% to 7% over 2012 to nearly 5 million sales this year, while the national median existing-home price is forecast to rise about 7.5%.