WASHINGTON – More Americans signed contracts to buy homes in March as the spring home buying season got underway.
The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index rose 1.4 per cent to 110.5, the highest level since May 2015.
Pending sales rose 3.2 per cent last month in the Northeast and 3 per cent in the South. After rising sharply over the past three years, states in the West registered a 1.8 per cent decline in pending home sales last month and a 7.9 per cent drop over the past year. Contracts were flat in the Midwest, rising just 0.2 per cent last month.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed.
Last month’s uptick came despite a limited supply of homes on the market, said Lawrence Yun, chief economist for the Realtors.
The housing market has been helped by low mortgage rates. The 30-year fixed rate mortgage last week stood at 3.59 per cent, near its low for the year. The 15-year fixed rate mortgage last week slipped to 2.85 per cent, the lowest since May 2013.
The Standard & Poor’s/Case-Shiller 20-city home price index rose 5.4 per cent in February from a year earlier as buyers competed for scarce homes, according to a report released Tuesday.
The Realtors said last week that sales of existing homes rose 5.1 per cent in March to a seasonally adjusted annual rate of 5.33 million, a partial rebound after a sudden drop in February.
But the Commerce Department reported Monday that sales of new homes slipped 1.5 per cent in March to a seasonally adjusted annual rate of 511,000. Sales plunged in the pricey West, which is prone to volatile swings in sales.
This story has been corrected to show that the latest pending home sales report is for March, not April.