US pending homes rise 1.5pc in March

(Sharecast News) - Contracts to purchase previously owned US homes rose at a faster-than-expected clip in March, according to the National Association of Realtors, but higher mortgage rates and ​constrained supply continued to weigh on the housing market. The NAR's ‌pending home sales index rose 1.5% to 73.7 in March, easily surpassing consensus estimates for a 0.5% increase. On an annualised basis, pending home sales dropped 1.1% .

Contracts rose across ​the Northeast and the South, but ⁠fell in the West and Midwest regions.

March's increase also comes as rates rose throughout the month as the US and Israel's ​conflict with Iran sent oil prices rocketting, with the popular 30-year ​fixed mortgage rate averaging 6.38% at the end of March, ​up from an average of 5.98% at ‌the ⁠end of February.

"Demand sensitivity to mortgage rates is greatest among first-time buyers, particularly younger buyers," ​said NAR chief economist Lawrence Yun. "As a result, boosting supply and new-home construction should focus on smaller, more affordable homes."



Reporting by Iain Gilbert at Sharecast.com