Pending home sales jumped 3.8% in March, helped by a sharp drop in mortgage rates

Buyers signed 3.8% more contracts for the purchase of existing homes in March compared with February, according to the pending home sales index from the National Association of Realtors. This was higher than expected by analysts.

Sales decreased 1.2% from March 2018, the fifteenth consecutive month of annual decline.

Buyers had added extra motivation in March, while mortgage rates had dropped to the lowest level in more than a year. The average 30-year fixed mortgage rate, which was popular, reached 5% in early November, but then began to fall and fell sharply in March to around 4%. This gave buyers additional buying power, as well as greater confidence in the market in which prices were overheating.

"We are seeing a positive sentiment among consumers with regard to the purchase of a home because mortgage applications have steadily increased and mortgage rates are extremely favorable," wrote Lawrence Yun. , chief economist at Realtors.

Yun also noted that pending sales have been unusually smooth over the last few months, but predicted that the numbers would begin to climb "more consistently."

Mortgage applications for home purchases, however, have weakened in recent weeks as mortgage rates are now a quarter of a percentage point higher than they were in March.

Home price increases have declined since last summer, but only after affordability has reached the worst level in more than a decade. Prices rose 4% nationally in February, following an annual gain of 4.2% in January, according to the S & P CoreLogic Case-Shiller housing price index.

At the regional level, Pending Home Sales in the Northeast declined 1.7% per month and 0.4% per year. In the Midwest, the index rose 2.3% on a monthly basis, but was 5.0% lower than in March 2018. Sales in the South rose 4.4% on a monthly basis and 0.7% % annually. Sales in the West jumped 8.7% a month, but were down 1.6% from last year.

"Despite some accessibility problems in the West, the numbers indicate that there is a reason for optimism." Inventories have also increased .These are excellent conditions for the region, "added Yun.

According to real estate agents, the supply of homes for sale continues to increase, but this increase could relate more to homes that remain in the market longer than the sharp rise in the number of new listings. Decreasing price increases may help, but only if rates stay low.

"The slowdown reflects the broader range of stocks that buyers had available to them this winter, which gave them more room to maneuver than they had for a while," he said. writes Matthew Speakman, analyst at Zillow. "Buyers may be seduced by lower mortgage rates as spring approaches, even though rates have been low for so long that they no longer cause the kind of intense demand that drives up the prices."