More consumers signed contracts in March to buy houses, a sign that a positive turn in the market may be ahead after actual home sales last month showed disappointing results.
Pending sales of single-family homes and condos increased 6.1% in March on a seasonally adjusted annual basis, the National Association of Realtors reported Wednesday. It was the greatest month-to-month increase since December 2023. This follows NAR’s report last week that existing home sales fell 5.9% in March. Actual sales often follow contract signings by 30 to 60 days.
As always, mortgage rates played a key role in buyers’ decisions to put down money on homes, said Lawrence Yun, the NAR’s chief economist. As of last Thursday, the average rate on a 30-year, fixed-rate mortgage was 6.81%, Freddie Mac reported. But it had fallen to 6.65% in mid-March.
“Home buyers are acutely sensitive to even minor fluctuations in mortgage rates,” Yun said in a statement. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable buildup of potential home buyers fueled by ongoing job growth.”
It’s not surprising that homebuying interest would grow in March; it’s the beginning of the spring shopping season, when purchases typically spike, Yun said. He noted that the supply of homes for sale was up 8.1% in March, giving consumers more choices.
On a regional basis, the South saw a 9.8% jump in pending sales in March from the prior month. Contracts in the Midwest and West also rose, though more modestly at 4.9% and 4.8%, respectively. The Northeast was the only region to see a decline, at 0.5%.
Since one year ago, pending sales have fallen across the U.S. by 0.6%. The Midwest was the only one of the four major regions to register an increase in transactions, at 1.4%. The Northeast was down 3%, the West 2% and the South, 0.4%.
