NAR: Low inventory drives pending-home sales lower in March  

by John Yellig

March pending-home sales slid 5.2% from February as housing inventory continued to fall short of homebuyer demand, the National Association of REALTORS® reported.  

Year over year, pending sales were down 23.2%, NAR said, citing its Pending Home Sales Index.  

 “Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price,” NAR Chief Economist Lawrence Yun said in a press release. “Sales in the second half of the year should be notably better than the first half as job gains continue, and more favorable mortgage rates are expected. Sales of new homes are already matching 2019 pre-COVID activity and are expected to increase in 2023, largely due to plentiful inventory in this segment of the market.” 

Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two.           

With continued improvements in employment and declining interest rates, NAR expects existing-home sales to increase in the coming months but still decline year over year. Specifically, existing-home sales will slide 9.3% on a year over year basis to 4.56 million in 2023 and rise 15.4% to 5.26 million in 2024. New-home sales are expected to increase 4.5% to 670,000 this year and rise another 11.9% next year to 750,000. 

Compared to last year, NAR forecasts that the national median existing-home price will decline by 1.8% to $379,600 in 2023 and rise by 2.8% to $390,000 in 2024. The median new-home price is expected to slide 1.9% to $449,100 in 2023, followed by an improvement of 4.2% to $468,000 in 2024. 

Regionally, pending home sales declined 8.1% month over month in the Northeast, 10.7% in the Midwest and 8% in the West. It ticked 0.2% higher in the South. 

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