Pending Home Sales Index Essentially Flat in March

Mark Lieberman

Managing Director and Senior Economist


  • National Association of Realtors’ March Pending Home Sales Index (PHSI) ROSE 0.4 percent from February to 107.6;
  • PHSI for February was revised down from 107.5 to 107.1;
  • Year-year the index was DOWN 3.3 percentage points;


  • The March increase was the second straight monthly increase; PHSI has declined only once (January) in the last six months;
  • Index is down year-year for the third straight months;
  • PHSI is essentially tracking the Census Bureau’s new homes report (also based on contracts for sale) which was flat in January and rose in February and March

Data Source: National Association of Realtors (NAR) 

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With some sleight of hand, the National Association of Realtors’ Pending Home Sales Index showed a slight increase in March – although not much – as the February reading was revised downward.

The NAR continued to blame a lack of inventory for the sideways movement in the PHSI but the bottom line is that the “increase” existing home sales notwithstanding – despite a blip up in March closings – continue to struggle.

A recent rise in mortgage interest rates added to the challenges faced by sellers – and would-be buyers – perhaps exacerbating or exacerbated by the changes in the tax law which capped the mortgage interest.

The increase in the PHSI should, all else being equal, mean a bump up in closings for April and May but the drop in the PHSI in January did not mean a drop in closings in March. Indeed, closings jumped likely because buyers feared a further increase in mortgage rates.

Mortgage rates reported by Freddie Mac last Thursday jumped to the highest level in over four years. And, according to the latest NAR data the inventory of homes for sale was down year-year and remains below the average of the last 12 months. NAR reported a 3.6-month supply of homes for sale; the sixth straight the months’ supply has been below four, the longest stretch since the NRA began calculating the months’ supply in 1999.

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