Pending-homes sales data, released today by the National Association of Realtors (NAR), follow the trend set by other industry metrics for last month—an uptick, but coming off numbers so low that the picture is still a depressing one.
Signed contracts rose 5.1% in March, bringing NAR’s Pending Home Sales Index to a reading of 94.1.
The uptick added to the list of increases the industry saw in March. Existing-homes sales were up 3.7%; single-family starts rose 7.7%; single-family permits increased 5.7%; and new-homes sales gained 11.1%. But while these improvements sound hopeful, March’s numbers came on the heels of some of the worst housing reports on record, which leaves numbers still very low.
The increase in pending sales also is likely related to FHA premiums, which increased 25 basis points on April 18, notes Patrick Newport, U.S. economist at IHS Global Insight.
“According to the Mortgage Bankers Association, mortgage applications for government insured loans rose 20% over a four-week period prior to the deadline, only to tumble 26.6% the week after the higher premiums went into effect,” Newport told Builder in an email. “March’s higher Pending Homes Sales Index reading is related to this rush to buy. The higher reading points to improving existing-homes sales in April and May. But sales in June will then take a hit because of payback.”
And, unfortunately, a less hopeful statistic also saw an increase in March: foreclosures, which gained 7% for the month. And while March’s pricing data is not yet available, February’s downward trend gave a bleak outlook.
“Housing has been stuck at the bottom for nearly two years,” Newport wrote. “March’s numbers offer little hope that the situation will improve soon.”
Claire Easley is senior editor, online, at Builder.
Learn more about markets featured in this article: Greenville, SC.