Pending Home Sales Rose in March Amid Limited Inventory

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Pending home sales saw a small rise from February to March according to the Pending Home Sales Index, although limited inventory is forcing contract activity to taper off.

The Pending Home Sales Index rose from 104.1 in February to 105.7 in March, a gain of 1.5 percent from the downwardly revised numbers heading in to the month. This also represents a seven percent increase in the annual basis, and making it the 23rd consecutive month that pending sales have risen above their year before figures.

While the Pending Homes Sales Index shows an increase in contract levels, the effect is beginning to slow, not because of declining demand, but rather because inventory continues to be tight. As such, NAR chief economist Lawrence Yun warned that near-term sales will see little movement. However, the upwards trend should continue and become more pronounced as the year moves on.

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