Pending Sales of Previously Owned U.S. Homes Retreated in March

Contracts to buy previously owned U.S. homes declined in March after rising a month earlier by the most since 2010, according to figures released Thursday from the National Association of Realtors in Washington.

Key Points

  • Pending home sales index fell 0.8 percent (forecast was for a 1 percent decrease) after jumping 5.5 percent the prior month
  • Index climbed 0.5 percent from March 2016 on an unadjusted basis
  • Pending sales dropped in three of four U.S regions month-to-month

Big Picture

Warmer-than-usual weather earlier in the year helped bring forward demand ahead of the busy spring sales season and likely tempered purchases in March. Buyers also sped up their entry in anticipation of rising home prices and higher borrowing costs. While strong job growth and wage gains will remain supportive for residential sales, a limited number of listings could reduce the scope of progress in the housing market in the coming months.

Economist Takeaways

“Home shoppers are coming out in droves this spring and competing with each other for the meager amount of listings in the affordable price range,” Lawrence Yun, NAR’s chief economist, said in a statement. “At some point -- and the sooner the better -- price growth must ease to a healthier rate. Otherwise sales could slow if affordability conditions worsen.”

Other Details

  • Purchases declined 2.9 percent in both the Northeast and the West, and fell 1.2 percent in the Midwest; sales rose 1.2 percent in the South
  • 42 percent of properties sold in March were at or above the listed price, second-highest amount since NAR began tracking the figures in 2012
  • NAR economist Yun projects 5.64 million existing-home sales this year, up 3.5 percent from 2016
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