NAR reports tight inventory remains a big issue
There is a slight increase in a key forward-looking indicator of US home sales… but one familiar issue remains a challenge.
The National Association of Realtors’ Pending Home Sales Index edged up 0.4% to a reading of 107.6 in March but the index was still 3% below its level a year earlier due to constrained supply.
"Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory," Lawrence Yun, NAR chief economist.
With demand strong, the frustration for both buyers and real estate agents is the difficulty in finding affordable homes.
Yun says sales are staying flat and won’t change until buyers, especially first-time buyers, are able to buy.
"Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive," said Yun. "That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth.”
In the Midwest the index rose 2.4% to 101.3 in March but is 6.0% lower than March 2017. The South climbed 2.5% to an index of 128.6 and was up 0.3% year-over-year. The index in the West declined 1.1% in March to 94.7 and is 2.2% below a year ago.
Despite the current conditions, Yun forecasts a rise in existing home sales for the whole of 2018 to 5.61 million, compared to 5.51 million in 2017. Median prices are forecast to rise by around 4.4%.
