The National Association of Realtors says its seasonally adjusted pending home sales index rose 3.4% to 97.4 in March. This is the first increase since June. However, the index remains 7.9% below its level a year ago.
The improvement in the harsh winter weather is partly to thank for the change. The frequent snowstorms and overall poor weather deterred a lot of would-be homebuyers from active house hunting, which negatively impacted open house attendance. Once temperatures fully recover, this will likely mean a healthy buying season.
The rise in contracts is a good sign for the housing market. This usually indicates the likelihood of a future purchase. USA Today reports that a one- to two-month lag often occurs between a signed contract and a completed sale.
Says USA Today, “At the same time, fewer Americans are applying for mortgages, a sign of weaker demand. The Mortgage Bankers Association’s mortgage applications index fell 3 percent last week from the previous week. And sales of new homes plunged 14.5 percent in March to the slowest pace in eight months, according to a government report last week. A jump in prices contributed to the decline.”