Pending home sales rose for the third straight month in March, and according to the National Association of Realtors (NAR) Pending Home Sales Index, they’re at their highest point since June 2013.
The index, an indicator of sales based on contract signings, was released this morning. It showed a 1.1 percent increase in pending sales for March and an 11.1 percent increase over the same time last year. This marks the third month in a row the sales have risen and the seventh year that pending sales numbers have improved.
The Pending Home Sales Index was at its highest point in June 2013, coming in at 109.4. As of March, it has now reached 108.6, its peak since that time.
The index also broke down pending home sales by region. While the South and West saw an increase of 4 percent and 1.7 percent for March, respectively, the Northeast and Midwest saw drops, decreasing by 1.5 percent and 2.5 percent.
All regions were up over March 2014. The Northeast rose .6 percent, the Midwest was up 11.3 percent, the West jumped 15.6 percent, and the South increased 12.4 percent.
As for explaining the ever-increasing sales, Lawrence Yun, chief economist at NAR, attributes it to a competitive spring market and an improving number of long-term homeowners.
“Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year," Yun said. "While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term homeowners."
Yun also said he expects sales to continue improving over the next few months, but that supply and rising prices could hinder them slightly.
“Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer," he said. "This in turn has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability."
See the index at Realtor.org.