Pending home sales surged in March as the market and mortgage rates continued to fluctuate.
Pending home sales rose 6.1 percent from the previous month in March, according to a monthly report from the National Association of Realtors. Activity did decline 0.6 percent annually in the third month of the year, but the monthly gain was still the largest since December 2023.
NAR’s pending home sales index, an indicator of activity based on contract signings, jumped to 76.5 in March. A score of 100 would represent signings equivalent to contract activity in 2001; in January, the 70.6 score was an all-time low for the index.
Lawrence Yun, chief economist of the trade group, noted in a statement how “buyers are acutely sensitive to even minor fluctuations in mortgage rates.”
Mortgage rates in March were down roughly 20 to 30 basis points compared to the first two months of the year, though still greatly elevated from the early pandemic. The average mortgage rate last month was 6.65 percent, down from 6.96 percent in January and 6.84 percent in February.
In the Northeast, the pending home sales index declined slightly from the previous month and even more from a year earlier. The three other regions in the report, however, posted month-to-month increases in the index and the Midwest marked the lone gain year-over-year.
Contract signings soared, particularly in the South, where the index jumped nearly 10 percent month-to-month.
Yun noted that the increase in activity could be linked to the typical start of the homebuying season, though he also pointed out that inventory jumped 8.1 percent from the prior month, “indicating a more dynamic housing-market environment.”
Trouble could be ahead, as mortgage rates slid this month. The average mortgage rate last week was 6.84 percent, according to a survey from Freddie Mac..
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