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Pending home sales rose less than expected in March as prices soared

A garage sale pending sign is posted in front of a home for sale in San Anselmo, California.

Justin Sullivan | California

Pending home trades, a measure of signed contracts on existing homes, rose 1.9% in March compared with April, according to the Patriotic Association of Realtors.

Forecasters had expected a 5% gain.

Pending sales were 23.3% higher than March 2020, but that annual likeness is skewed widely because the housing market essentially ground to a halt last March at the start of the coronavirus pandemic. The trade in then rebounded strongly last summer and is still showing incredibly solid demand.

Pending home garage sales are a forward-looking indicator of closed sales in one to three months.

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“Low inventory has been a consistent problem, but more inventory will show up as new home construction intensifies in the be brought up months, as well as from a steady wind-down of the mortgage forbearance program,” said Lawrence Yun, chief economist for the Realtors. “Although these shake ups won’t immediately replenish low supply, they will be a step forward.”

Home prices, already sky high, are continuing to succeed at a pace not seen in more than 15 years. Strong demand and record-low supply are fueling bidding contention fightings across the nation.

Prospective buyers have lost purchasing power due to rising mortgage rates, which be struck by climbed steadily since the start of the year and more so during March. The average contract rate on the popular 30-year solid mortgage started the month at 3.22% and ended around 3.45%, according to Mortgage News Daily. It started the year at 2.76%.

“Today’s improve signals plenty of homebuyer demand, and suggests that where buyers can find sellers, home sales ordain happen,” said Danielle Hale, chief economist at realtor.com. “Data show that while we saw an increase in new sellers in April, we at rest don’t have as many as in recent pre-pandemic years.”

Despite the rise in vaccinations, Hale says her surveys find dormant sellers are still skittish about letting people tour their homes, as health concerns are among a number of factors keeping some sellers out of the market.

Regionally, pending home sales in the Northeast rose 6.1% for the month and knock 3.7% in the Midwest. In the South monthly sales jumped 2.9%. In the West, sales rose 2.9% in March compared with February.

Mark-downs of newly built homes in March, which are also measured by signed contracts, jumped a much larger 21% month-to-month, as consumers frustrated with the lack of existing homes for sale have now turned to new construction.

The Realtors are projecting existing retirement community sales to rise by 10% in 2021 to 6.2 million in 2021, while the median home price is anticipated to bourgeon by 9% in 2021 to $323,900.

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