After remaining flat in February, pending home sales increased in March, floating above year-ago levels, according to the National Association of Realtors, which noted contract activity in recent months shows only modest movement.
March represents the 23rd consecutive month that pending sales have been above year-ago levels, reports NAR.
"Contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses," said Lawrence Yun, chief economist for NAR.
The NAR pending home sales index rose 1.5% to 105.7 in March after slipping 0.4% in February. The March index is 7% above March 2012, when it was 98.8.
The NAR report notes that an index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5 to 5.5 million, which is considered normal for the current U.S. population.
Yun projects existing-home sales to rise 6.5% to 7% over 2012 to nearly 5 million sales this year. Yun added, "Job additions and rising household wealth will continue to support housing demand."
The PHSI in the Northeast was unchanged at 82.8 in March and is 6.3% higher than March 2012. The index increased 0.3% to 103.8 in the Midwest, 13.7% above a year ago. The South saw a 2.7% increase to an index of 120 and is 10.4% higher than March 2012. The West experienced a 1.5% increase in March to 102.9; however, it is 4.3% lower than a year ago.