March pending home sales jump 3.8% in second gain this year
Contract signings to purchase previously owned homes rebounded in March by more than forecast for the second gain in three months, adding to signs of stabilization in the housing market.
The index of pending home sales jumped 3.8% from the prior month, after a 1% decrease in February, according to data released Tuesday by the National Association of Realtors in Washington. The gauge was down 3.2% from a year earlier on an unadjusted basis.
The data suggest sustained wage gains, lower mortgage rates and more affordable housing options are attracting homebuyers. That's helping to steady the market after last year’s slump. At the same time, other data have shown a mixed picture of the U.S. housing market. Sales of previously owned homes fell last month while purchases of new homes rose to a 16-month high.
A separate report Tuesday showed home prices in 20 U.S. cities rose in February at the slowest pace since 2012, decelerating for an 11th straight month. The improved affordability could be one of the factors driving recent demand. Pending home sales are often looked to as a leading indicator of existing home sales, which make up 90% of the market. Since sales are counted once a deal closes, the measure can be a good indicator of the health of the housing market in the next couple of months.
"We are seeing a positive sentiment from consumers about home buying, as mortgage applications have been steadily increasing and mortgage rates are extremely favorable," NAR Chief Economist Lawrence Yun said in a statement. While the overall market is still underperforming, there is pent-up demand that should drive gains in the coming quarters and years, he said.
Contracts rose from the prior month in three of four regions, led by an 8.7% increase in the West, the biggest gain since 2010. Pending sales fell 1.7% in the Northeast, the second straight drop.