Photo credit: Michael Patrick
Pending sales of US homes have risen for the past three months in a row, as the market enjoys a spring bounce fuelled by improving employment and economic conditions.
The National Association of Realtors’ latest index rose 1.1 per cent in March 2015, the third monthly increase in a row, as sales remain at their highest level since June 2013. The index is now 11.1 per cent higher than a year ago, the seventh month of annual rises in a row.
“Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year,” says Lawrence Yun, NAR chief economist.
“While contract activity being up convincingly compared to a year ago is certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year’s activity is being driven by more long-term homeowners.”
Yun expects a gradual improvement in home sales in the months ahead, although low supply and rising prices could be a drawback to sales reaching their full potential.
“Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer,” he continues. “This in turn has pushed home prices to unhealthy levels — nearly four or more times above the pace of wage growth in some parts of the country. Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability.”