Pending Home Sales Continue On The Rise In March

Dennis Norman

Today the National Association of REALTORS released it’s Pending Home Sales Index for March showing an increase of 5.3 percent in the index from February  (seasonally adjusted) and a whopping 21.1 percent increase from March 2009.  This follows an 8.3 percent increase in February so it is definitely creating a nice trend that makes me somewhat optimistic.  We should remember though, in March and April we are expecting to see home sales spike as buyers rush to buy before the April 30th deadline to have a home under contract to qualify for the homebuyer tax credit.

Here are highlights from the report:

• March”s pending home sales index (seasonally adjusted) was 102.9 (the index is based upon 100.0 being equal to the average level of sales activity in 2001 which we could call the last “normal” year) which was a 5.3 percent increase in the index from February and an increase of 21.1 percent from the year before.
• March’s not-seasonally adjusted index index was at 118.4, a 32.9 percent increase from February and a 23.5 percent increase from a year ago.
• The only region that saw a month-over-month decline in pending home sales (seasonally adjusted) was the Northeast region with a decrease of 3.3 percent from February.
• The South had the largest month-over-month increase in pending home sales (seasonally adjusted) with a 12.7 percent increase from February, and also had the largest year-over-year increase as well with a 28.3 percent increase from March 2009.

Lawrence Yun, NAR chief economist, said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

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