The National Association of Realtors’ leading indicator of future existing home sales increased in March, but contract activity in recent months is only improving modestly.
The trade association’s pending sales index, which is based on contract signings, rose 1.5% to 105.7 in March. This is 7% more than March 2012 when the index was 98.8.
According to NAR,
In the Northeast, the index was unchanged month-over-month at 82.8, which is 6.3% higher than this time last year. Meanwhile, the Midwest’s index was up 0.3% to 103.8, 13.7% greater on an annual basis. Pending sales in the South increased by 2.7% to an index of 120, up 10.4% from a year ago. Lastly, the West’s index improved 1.5% to 102.9, but is 4.3% less than last year.
Despite increases in pending sales for the majority of the regions throughout the nation, Lawrence Yen, chief economist for the National Association of Realtors, said the market appears to be leveling off.
“Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses,” Yun said.
Overall, NAR is projecting a 6.5% to 7% increase in total existing home sales this year over 2012, with approximately five million sales. Additionally, economists are predicting the median existing home price to rise by 7.5%.
“Job additions and rising household wealth will continue to support housing demand,” Yun added.
