Pending home sales increased slightly in March, but the lack of choice among prospective buyers continues to impede the number of new contracts. The Pending Home Sales Index increased 0.4% in March, but remains 3.0% below the level a year ago, and the PHSI declined on an annualized basis for the third straight month. The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR). The PHSI increased to 107.6 in March from a downwardly revised 107.2 in February.
In the Northeast, the PHSI declined by 5.6% in March, likely because of winter storms, and is down 8.1% from a year ago. The Midwest and South increased 2.4% and 2.5% in March, while the West declined by 1.1%. Year-over-year, the PHSI remains slightly up by 0.3% in the South, but declined by 2.2% in the West and 6.0% in the Midwest.
NAHB recently reported that buyers are not seeing improvement in housing availability, although new and existing sales increased in March. The expanding economy and healthy job market continue to generate demand, and builder confidence remains in solid territory, suggesting continued growth in new residential construction.