US Pending Home Sales (M/M) Mar: 1.9% (est 4.4%; prev R -11.5%) - a disappointing bounceback - details

US Pending Home Sales (M/M) Mar: 1.9% (est 4.4%; prev R -11.5%)

Pending Home Sales NSA (Y/Y) Mar: 25.3% (est 27.5%; prev R -3.8%)



March pending home sales (which are contract signings not actual transactions) bounced back after a plunge in February although less than expectations.  Prices and low inventories remain the predominant issues.  All regions but the Midwest saw m/m gains.  Here is some commentary from the report.

"The increase in pending sales transactions for the month of March is indicative of high housing demand," said Lawrence Yun, NAR's chief economist. "With mortgage rates still very close to record lows and a solid job recovery underway, demand will likely remain high."

"Low inventory has been a consistent problem, but more inventory will show up as new home construction intensifies in the coming months, as well as from a steady wind-down of the mortgage forbearance program," Yun continued. "Although these moves won't immediately replenish low supply, they will be a step forward."

According to Yun, even with rising mortgage costs, rates are expected to remain relatively low at no more than 3.5% in 2021. He says the rates are still advantageous to both prospective buyers and to current homeowners who are contemplating refinancing.

Existing-home sales are projected to rise by 10% in 2021 to reach 6.2 million in 2021, while the median home price is anticipated to increase by 9% in 2021 to $323,900.

In terms of regions, 

The Northeast PHSI rose 6.1% to 97.9 in March, a 16.7% increase from a year ago. In the Midwest, the index fell 3.7% to 98.6 last month, up 14.1% from March 2020.

Pending home sales transactions in the South jumped 2.9% to an index of 137.2 in March, up 27.9% from March 2020. The index in the West grew 2.9% in March to 94.5, up 29.8% from a year prior.

To see more content, including summaries of some of today's economic reports and my nightly Summary go to https://sethiassociates.blogspot.com


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