NAR: Pending home sales increase in March
WASHINGTON – April 28, 2014 – After months of stagnant activity, pending home sales rose in March, marking the first gain in the past nine months, according to the National Association of Realtors®.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 3.4 percent to 97.4 from an upwardly revised 94.2 in February. However, year-to-year, it's down 7.9 percent below its 105.7 in March 2013.
"After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers," says Lawrence Yun, NAR chief economist, who calls the uptick inevitable. "Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy."
The PHSI in the Northeast increased 1.4 percent to 78.8 in March but is 5.9 percent below a year ago. In the Midwest, the index slipped 0.8 percent to 94.5 in March and its 10.1 percent below March 2013.
Pending home sales in the South rose 5.6 percent to an index of 112.7 in March but below 5.3 percent below a year ago. The index in the West increased 5.7 percent in March to 91.0, but it's 11.1 percent below March 2013.
"The March increase … comes as a relief," says BMO Capital Markets economist Jennifer Lee. She says the recovery "is still on track."
Although home sales are expected to trend up over the course of the year and into 2015, the year began on a weak note and total sales are unlikely to match the 2013 level, NAR says.
Existing-home sales are expected to total just over 4.9 million this year, below the nearly 5.1 million in 2013. However, with ongoing inventory shortages in much of the U.S., the national median existing-home price is expected to grow between 6 and 7 percent in 2014.
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