A gauge of signed contracts to purchase previously-owned homes rose less than forecast in March while the prior month's reading was revised down, indicating a lack of inventory is restraining the market
The pending home sales index rose 0.4% from February; the estimate was for a 0.7%, according to the National Association of Realtors. This followed a revised 2.8% increase in February from January, revised downward from the original 3.1%. The index declined 4.4% year-over-year on an unadjusted basis after a revised 4.7% decrease in March 2017.
The latest results show that interested buyers continue to face a persistent shortage of affordable inventory that is driving up property prices faster than wage growth. Nonetheless, a solid job market and lower taxes are helping underpin demand for housing even as
The NAR revised its annual sales forecast to 5.61 million existing homes this year, 1.8% more than in 2017. It previously projected sales would match last year’s 5.51 million.
Existing-home sales
"Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory," Lawrence Yun, the NAR's chief economist, said in a statement. "Prospective buyers are increasingly having difficulty finding an affordable home to buy.
"It is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers – especially first-time buyers – will be left on the sidelines."
Purchases dropped 5.6% in the Northeast, reflecting multiple winter storms. Sales declined 1.1% in the West. However, they climbed 2.5% in the South and 2.4% in the Midwest.