UPDATE: Pending home sales rise 1.4% to 10-month high in March
An index that tracks home contract signings rose again in March as low interest rates boost homebuying.
A gauge of pending home sales rose 1.4% in March, its second monthly increase, and a sign of momentum for the spring buying season.
The National Association of Realtors’ pending home sales index (http://www.realtor.org/topics/pending-home-sales) rose to 110.5, the group said Wednesday. After a downward revision to February data, the index is 1.4% higher than the level it touched both a year ago and a month ago. Economists surveyed by MarketWatch had forecast a 0.7% rise.
The index forecasts future sales by tracking real estate transactions in which a contract has been signed, but the deal has not yet closed.
Only the West, where demand has driven prices sky-high, saw a decline in March. The lack of inventory of previously-owned homes (http://www.marketwatch.com/story/existing-home-sales-soar-51-in-march-as-housing-demand-remains-strong-2016-04-20), combined with slow building activity (http://www.marketwatch.com/story/housing-starts-sink-88-in-march-2016-04-19), are constraining the housing market, said NAR Chief Economist Lawrence Yun in a statement.
“Demand is starting to weaken in some areas, particularly in the West, where the median home price has risen an astonishing 38% in the past three years,” Yun noted.
The pending sales index for the West declined 1.8% in March and is 7.9% lower than a year ago. In the South, sales rose 3.0% in March but are 0.6% lower than a year ago. The Northeast index was up 3.2% in March and stood 18.4% higher than a year ago, while the Midwest index inched up 0.2% for the month and 4.0% for the year.