Regionally, pending home sales increased 8.7% in the West, 4.4% in the South and 2.3% in the Midwest, however, contract signings fell 1.7% in the Northeast, compared with the previous month.
Year-over-year, total contract signings decreased 1.2%, making March the 15th straight month of annual decreases.
However, most economists are still forecasting a strong spring home buying season.
“We are seeing a positive sentiment from consumers about home buying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable,” says Lawrence Yun, chief economist for NAR, in a statement.
Yun notes that sales activity in the West increased at a relatively stable rate for five consecutive months before the region saw a significant spike in activity in March.
“Despite some affordability issues in the West, the numbers indicate that there is a reason for optimism. Inventory has increased, too,” he says. “These are great conditions for the region.”
The report shows that inventory is on the rise in certain areas, with Denver-Aurora-Lakewood, Colo.; Seattle-Tacoma-Bellevue, Wash.; San Francisco-Oakland-Hayward, Calif.; Portland-Vancouver-Hillsboro, Ore.-Wash.; and Nashville-Davidson-Murfreesboro-Franklin, Tenn., seeing the largest annual increases in active listings.
Although pending contracts appear to be on an overall upswing, Yun says current sales activity is underperforming.
“In the year 2000, we had 5 million home sales,” he says. “Today, we are close to that same number, but there are 50 million more people in the country. There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years.”