Market outperforms expectations
Pending sales of existing US homes increased in March, hitting their highest level for a year as the housing market defied inventory shortages and climbing interest rates.
The National Association of Realtors (NAR) said that pending sales, which are based on contract signings instead of closings, jumped 3.4% nationally last month – a surprise to economists polled by FactSet, who had expected sales to tick down slightly by 0.3%.
The Midwest was the only part of the country not to register higher pending sales in March on a month-over-month basis, although NAR chief economist Lawrence Yun noted that the index had remained “in a fairly narrow range” over the previous 12 months.
“Meaningful gains will only occur with declining mortgage rates and rising inventory,” he said in comments accompanying NAR’s release.
Pending home sales climbed 3.4% in March. The Northeast, South and West posted monthly gains in transactions while the Midwest recorded a loss. https://t.co/ly7bgfU16U
— National Association of REALTORS® (@nardotrealtor) April 25, 2024
The uptick arrived despite a further increase in the contract rate on a 30-year fixed mortgage last week. The Mortgage Bankers Association (MBA) said that rate increased to 7.24% in the week ending April 19, as Freddie Mac chief economist Sam Khater noted purchase demand had remained “steady” in the face of rising rates.
“With rates staying higher for longer, many homebuyers are adjusting,” Khater said, “as evidenced by this week’s report that sales of newly built homes saw the biggest increase since December 2022.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
