The Pending Home Sales Index rose more than expected with a 3.2% advance in March, against forecasts that it would be unchanged after a revised 2.0% gain in February. The index now stands at 84.6.
Annually, pending sales have risen 1.1% since March 2008.
The index, released by the National Association of Realtors, gives some hope that the housing market may be stabilizing, and NAR chief economist Lawrence Yun said momentum could build up in the coming months.
“We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” he said.
Yun added that first-time buyers are responding favorably to an $8,000 tax credit, adding that affordability conditions remain near record highs.
The affordability index ― which measures the relationship between home prices, mortgage interest rates, and family income ― moved down slightly to 166.7 in March, but it remains nearly 31% higher than one year ago.
Economics strategist Ian Pollick from TD Securities attributed the gain to "the dramatic retreat in mortgage rates." He called the report "encouraging," but expressed caution going forward.
"As long as the U.S. labor market continues to wane, and as long as overall economic activity remains sparse, the necessary conditions for a housing market revitalization will not occur," Pollick said.
Austin Texas apartments
Grass valley real estate
The Pending Home Sales Index
Linear Mode
