The housing market may be bogging down, suggested by only weak improvement in pending home sales in recent months, according to figures released today by the National Association of Realtors (NAR).
Signed contracts for home purchases increased a seasonally adjusted 1.5 percent in March, according to today’s NAR pending home sales index, following a slight decline in February’s figures. While March’s figures represent a 7.0 percent annual gain over their March 2012 level and the 23rd consecutive month of annual gains for the index, it appears the market may be leveling out, according to NAR chief economist Lawrence Yun.
“contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply,” Yun said. “Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses.”
Yun said he expects that rising employment and household wealth should continue to support housing demand through the year.
West slips; Midwest showing strength
The NAR is forecasting that existing-home sales will increase from 6.5-7.0 percent this year, to a total of nearly 5 million units, with median home prices expected to rise approximately 7.5 percent nationally.
The housing market in the West region of the country is showing some weakness, with the pending sales index for that region down 4.3 percent from one year ago, despite showing some monthly improvement in March. The strongest annual gains were posted in the Midwest, where pending sales are up 13.7 percent from one year ago.
Pending home sales in the South are up 10.7 percent from their March 2012 levels, while the Northeast s up 6.3 percent on an annual basis.
Pending Home Sales Flatten Out | MortgageLoan.com.