US pending home sales jump in March to hit highest in the year

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 per cent to 78.2 last month. The median estimate of economists surveyed by Bloomberg called for 0.4 per cent growth. 

The gains were led by the South and the West, and, to a lesser extent, the Northeast. 

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.”

Sales of previously-owned homes have lagged new-home sales recently, as the nation’s home builders bought down customers’ interest rates or offered other sweeteners to complete deals. The supply in the home resale market, meantime, is well below pre-pandemic levels.  

Many in the existing-home industry are eager for the Federal Reserve to trim interest rates, which Yun last week blamed for causing the market to remain “stuck.” The contract rate on a 30-year fixed mortgage rose to 7.24 per cent in the week ended April 19, its highest level in five months, Mortgage Bankers Association data show.

SEE ALSO

US 30-year mortgage rate rises to five-month high of 7.24%

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The pending-sales report tends to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold. BLOOMBERG