US Pending Home Sales Rebound Off Record Lows, Despite Rising Mortgage Rates

After rising in February, US Pending Home Sales were expected to continue to improve in March (+0.5% MoM) but – despite apparently rising mortgage rates – sales rose 1.5% MoM (even with February revised up to +2.5% MoM). This dragged pending home sales up to +1.8% YoY (to the highest level since Nov 2024)…

Source: Bloomberg

…extending its bounce off record lows…

Source: Bloomberg

“Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand,” NAR Chief Economist Lawrence Yun said in a statement.

“A greater supply of inventory will help translate that demand into more home sales.”

Pending home sales in the South, the biggest home-selling region in the country, increased 3.9% in March.

They rose 4.4% in the Northeast but decreased in the Midwest and West.

While mortgage rates did pick up at the start of March (Iran War), pending home sales have been disconnected from improving ‘affordability’ in recent months…

Source: Bloomberg

As a reminder, because houses typically go under contract a month or two before they’re sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.