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Pending sales of existing US homes in March reached their highest levels in a year in spite of persistently high borrowing costs and a low supply.
An index of contract signings from the National Association of Realtors® climbed 3.4% to 78.2 last month, the highest since February 2023.
The gains were led by monthly gains at or near 7% in the South and West, and, to a lesser extent, the Northeast. The Midwest was the only region where pending sales fell.
While the pending-sales index reached a high point, “it still remains in a fairly narrow range over the last 12 months without a measurable breakout,” NAR Chief Economist Lawrence Yun said in a statement. “Meaningful gains will only occur with declining mortgage rates and rising inventory.”
NAR sees median home prices rising 1.8% both this year and next, climbing to a record $396,800 in 2024 and $403,800 in 2025. Prices of new houses may dip slightly to $426,100 this year, NAR predicts, because developers are building smaller — thus less costly — homes. But they’re seen snapping back up next year.
“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales,” Yun said. “Given the lingering housing shortage, home prices will march higher, albeit much more slowly than in the past.”