The National Association of Realtors said on Monday its Pending Home Sales Index, which factors contracts signed only last month, ticked up 3.4 percent to 97.4. The March increase not only beat economists’ expectations for a 1.0 percent gain, but it was the first time in nine months the index didn’t fall.
Still, many economists are cautiously optimistic after a recent shakiness in the housing market. Contracts become sales after a month or two, so the March increase suggests home resales could continue to rebound in the months ahead. But there is little dispute housing markets disappointed last summer, exposing suspected volatility and weakness after small increases in mortgage interest rates.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” said Lawrence Yun, the chief economist for the NAR.
“Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
But some are already taking exception with his statements, since the number of properties to build on was down, but vacate properties remain in over-supply.
Existing home sales in March fell to their lowest level in more than 1-1/2 years, but it is the fact that more first-time buyers are coming into the market that gives reason for optimism.
Despite last month’s surge, pending home sales were still down 7.9 percent compared to March of last year because buyers remained sidelined. The Federal Reserve will no doubt continue to print money and keep interest rates as low as possible despite risks to inflation.
Contracts increased in the Northeast, in the South and in the West. They, however, fell in the Midwest.