The Pending Home Sales Index decreased 0.8% in March 2017, but remains 0.8% above its level a year ago. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased to 111.4 in March, down from 112.3 in February.
The PHSI increased in the South by 1.2%, but fell by 1.2% in the Midwest and 2.9% in both the Northeast and West. Year-over-year, the PHSI increased 3.9% in the South and 1.8% in the Northeast, but fell 2.4% in the Midwest and 2.7% in the West.
March existing sales surged 5.8%, so the small decrease in the PHSI suggests a pause in sales for next month. NAR cites price growth as a damper to sales, especially among first-time buyers. However, builder sentiment remains firm, and March new home sales were strong. As the economy continues to add jobs, increased demand among first-time buyers will support new and existing sales in 2017.