Housing News

The Housing Market Begins to Thaw as More Homes Go Under Contract

Buyers snapped up more homes in March as the housing market began to thaw.

The number of pending sales increased 6.1% from February to March, according to a recent report from the National Association of Realtors (NAR.) However, pending sales were down 0.6% from March of last year.

Pending sales are homes that went under contract but haven’t closed yet.

The jump in sales is likely at least partially due to the temporary drop in mortgage interest rates in March. Rates for 30-year, fixed-rate loans had come down from nearly 7% at the beginning of the year to the 6.6% range, according to Freddie Mac data.

“Homebuyers are acutely sensitive to even minor fluctuations in mortgage rates,” said NAR Chief Economist Lawrence Yun in a statement. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential homebuyers, fueled by ongoing job growth.”

Another perk for buyers is more homes going onto the market, leading some sellers to cut prices.

The number of homes for sale was up 5.3% from February to March and shot up 28.5% year-over-year, according to Realtor.com data. This provided buyers with more options—and bargaining power.

In March, price reductions were up 15.2% month-over-month and jumped 37.2% compared to the previous year, according to Realtor.com data.

“Higher [housing] inventory levels also offered buyers more choices,” said First American Deputy Chief Economist Odeta Kushi in a statement. “Although pending home sales are slightly down compared with last year, the month-over-month bounce is a step in the right direction.”

More homes went under contract in the Midwestern, Southern, and Western regions in the country, while the number of homes going under contract slipped in the Northeast.

“Consumers should note that the spring homebuying season typically brings in a surge of homebuyers and sellers compared to the winter months,” said Yun.