Pending Homes Sales Index Increased 1.9% in March

The National Association of Realtors® (NAR) has reported their Pending Homes Sales Index (PHSI), which is based on signed real estate contracts, not actual closings, for existing single-family homes, condos, and co-ops, increased 1.9% in March 2021 to a reading of 111.3. An index of 100 is equal to the level of contract activity in 2001. This marks the first upward movement in PHSI following two months of steady declines. Year-over-year contract signings jumped 23.3%. Lawrence Yun, chief economist for the NAR said, “The increase in pending sales transactions for the month of March is indicative of high housing demand. With mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high.” While low inventory has been a consistent problem, Yun said he expects more inventory to show up as new home construction ramps up in the coming months. “Although these moves won’t immediately replenish low supply, they will be a step forward,” Yun said.