U.S. Pending Home Sales Climbed in March

By Ed Frankl

The number of houses going under contract increased in March, despite high mortgage rates and a squeezed inventory. Here are the main takeaways from the National Association of Realtors' report released Thursday:

--The pending home sales index, a leading indicator of home sales based on contract signings, ticked up 3.4% compared with a month earlier to 78.2 in March. It was 75.6 in February. A reading of 100 is equal to the level of contract activity in 2001.

--Economists polled by The Wall Street Journal had expected the index to be flat.

--While March's reading marks the best performance in a year, it remains within a narrow range of the last 12 months, Lawrence Yun, NAR chief economist, said. "Meaningful gains will only occur with declining mortgage rates and rising inventory," he added.

--The Northeast, South and West regions registered gains of 2.7%, 7.0% and 6.8% on month respectively, though the Midwest region dipped by 4.3%.

--Compared with one year ago, pending home sales edged up 0.1%, with the Midwest and West improving but the Northeast and South registering falls.

--In quarterly forecasts, NAR expects that existing-home sales will rise on year by 9% in 2024 and another 13.2% in 2025, while housing starts will climb 1.2% in 2024 and 4.9% in 2025.

--"Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it's inevitable that sales will rise in coming years," Yun said.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

04-25-24 1014ET